If a Firm Knows That the Demand for Its Product

question 65

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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Definitions:

Conscious Memory

The ability to recall and recognize information and past experiences that one can consciously acknowledge and describe.

Schemas Associated

Mental structures that represent aspects of the world and influence understanding, recognition, and recall by organizing information.

Chinese Language

A group of languages used in China, of which Mandarin is the most widely spoken variety.

Accommodation

In psychology, the process by which individuals adjust their mental frameworks to incorporate new information; in eyesight, the eye's ability to focus on objects at various distances.