A Firm Is Currently Producing in the Elastic Portion of Its

question 72

Multiple Choice

A firm is currently producing in the elastic portion of its demand curve. What course of action do you recommend for it assuming it wants to raise revenue?

• A) Continue producing at the current output level, because it maximizes its total revenue by producing in the elastic portion of its demand curve.
• B) Reduce price, because if it reduces price and demand is elastic, total revenue will increase.
• C) Increase price, because if it increases price and demand is elastic, total revenue will increase.
• D) Continue selling at the same price, but increase the amount it produces.

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Definitions:

Diverse Cultural Backgrounds

The varied ethnic, national, traditional, and social backgrounds from which people hail, contributing to a rich multiplicity of experiences and perspectives.

Effective Communication

The exchange of information or ideas in a manner that is clear, concise, and understood by all involved parties.

Double-Checking

The act of verifying or reviewing information, work, or details a second time to ensure accuracy or correctness.

Conversational Ritual

Patterns or practices followed during communication that serve to establish or maintain social bonds.