The Price Elasticity of Demand Is −2

question 17

Multiple Choice

The price elasticity of demand is −2.0 for a certain firm's product.If the firm raises price,the firm manager can expect total revenue to:

• A) decrease.
• B) increase.
• C) remain constant.
• D) either increase or remain constant, depending upon the size of the price increase.

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Definitions:

Product Variety

The range of different products or services offered by a company to meet various customer needs and preferences.

Distribution Network

A system of warehouses, transport services, and distribution centers that facilitates the movement of products from manufacturers to consumers.

Manufacturer

A company or individual that produces finished goods from raw materials using various processes, tools, and machinery.

Economies Of Scale

The cost advantage achieved by an increase in production, leading to a lower cost per unit.