If a Firm Knows That the Demand for Its Product

question 20

Multiple Choice

If a firm knows that the demand for its product is inelastic,it could generate more revenue by:

• A) lowering the price, because the resulting change in sales would be relatively large.
• B) raising the price, because the resulting change in sales would be relatively large.
• C) lowering the price, because the resulting change in sales would be relatively small.
• D) raising the price, because the resulting change in sales would be relatively small.

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