If a Revenue-Maximizing Firm Is Told That the Price Elasticity

question 193

Multiple Choice

If a revenue-maximizing firm is told that the price elasticity of demand is equal to one, it should:

• A) raise prices 1 percent.
• B) lower prices 1 percent.
• C) raise prices until the elasticity becomes very high.
• D) keep the price where it is.
• E) lower prices until the elasticity becomes very high.

---

Definitions:

Student Participation

The involvement of students in the learning process, often characterized by engagement in classroom discussions, activities, and decision-making.

Independent Variable

The experimental element that is manipulated to observe its effect on the dependent variable within scientific research.

Dependent Variable

In research, it's the variable that is being tested and measured, expected to change as a result of manipulations to the independent variable.

Manipulated

Refers to the controlled alteration or handling of variables in experiments to determine cause-and-effect relationships.