Question

A firm is contemplating increasing the price of its good. What would happen to total​ revenue?...

A firm is contemplating increasing the price of its good. What would happen to total​ revenue?

A. It will rise if the demand for their product is price elastic.

B. It will fall if the demand for their product is unit elastic.

C. It will fall if the demand for their product is price inelastic.

D. It will rise if the demand for their product is price inelastic.

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Ans: It will rise if the demand for their product is price inelastic.

Explanation:

Elastic demand means a percentage change in price leads to more than a percentage change in quantity demanded. On the other hand., inelastic demand means a percentage change in price leads to less than a percentage change in quantity demanded.

A firm is contemplating increasing the price of its good, and if the demand for their product is price inelastic, then demand will not decrease much. Therefore, total revenue will rise.

Thus, option [D] is correct answer.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
When the demand for a product is price elastic, a rise in its price causes total...
When the demand for a product is price elastic, a rise in its price causes total revenue to: Select one: a. fall because quantity sold remains the same and thus total revenue falls. b. fall because the higher price per product is not enough to offset the decrease in revenue from the fall in quantity sold. c. rise because the higher price per product will more than offset the fall in revenue due to the decrease in quantity sold. d....
5. Identify how total revenue changes if Demand is inelastic and price falls; a. Total revenue...
5. Identify how total revenue changes if Demand is inelastic and price falls; a. Total revenue falls b. Total revenue rises c. Total revenue remains constant d. None of the above 6. Identify how total revenue changes if Demand is elastic and price falls; a. Total revenue falls b. Total revenue rises c. Total revenue remains constant d. None of the above. ' 7. In the following pair of goods, which has the higher price elasticity of demand: (a) Airline...
1. when decreasing the price of diapers from $10 to $8 dollars total revenue Increases. demand...
1. when decreasing the price of diapers from $10 to $8 dollars total revenue Increases. demand price is inelastic, unit elastic or elastic? 2. when decreasing the price of diapers from $4 to $3 total revenue Decrease demand price is unit elastic, inelastic, or elastic? 3. The business would want to know the profit maximizing price at this price, demand price is inelastic, unit elastic or elastic?
The CEO of Mainway Toys wants to increase total revenue for the firm and proposes a...
The CEO of Mainway Toys wants to increase total revenue for the firm and proposes a 10% decrease in the price of all toys. a. The price elasticity of demand for toys is 2.5. Is the demand for toys price elastic, unit elastic, or price inelastic? b. Will the CEO’s proposal to decrease all toy prices by 10% increase, decrease, or have no impact on total revenue for Mainway Toys? Explain. c. Assuming the demand for Mainway Toys is linear,...
If the price elasticity of demand is 1.0, and a firm raises its price by 10...
If the price elasticity of demand is 1.0, and a firm raises its price by 10 percent, the total revenue will a.) rise by 100% b.) fall by 10% c.) rise by 10% d.) not change
Categories of Price Elasticity of Demand For each of the following values for price elasticity of...
Categories of Price Elasticity of Demand For each of the following values for price elasticity of demand, indicate whether demand is elastic, inelastic, perfectly elastic, perfectly inelastic, or unit elastic. Also, indicate (increase, decrease, no effect) what would happen to total revenue if a firm raised the price in each elasticity range. Price Elasticity of Demand equals Descriptionn of Elasticity Total Revenue Change -2.5 -1.0 -0.8 -infinity 0
For the following question: At a price of $18, 100 are demanded At a price of...
For the following question: At a price of $18, 100 are demanded At a price of $12, 300 are demanded At a price of $6, 500 are demanded. 25. _____ According to the above information, if the price decreased from $18 to $6, what would happen to total revenue: A. total revenue would increase by $1,200 and demand would be elastic B. total revenue would increase by $800 and demand would be elastic C. total revenue would decrease by $1,200...
The Pittsburgh Steelers are considering increasing the price of the their jerseys the sell in the...
The Pittsburgh Steelers are considering increasing the price of the their jerseys the sell in the stadium from $130.00 to $165.00; however they found their sales decreased from 30,000 to 22,300 during one game. Should they increase their price, what is the Ed coefficient, is the demand elastic, inelastic, or unit elastic? What happened to the total revenue? Is this a good move or a bad move for the team?
a. How much would the firm’s revenue change if it lowered price from $12 to $10?...
a. How much would the firm’s revenue change if it lowered price from $12 to $10? Is demand elastic or inelastic in this range? Revenue change: $ -3.66 -3.66 Incorrect Demand is elastic Correct in this range b. How much would the firm’s revenue change if it lowered price from $4 to $2? Is demand elastic or inelastic in this range? Revenue change: $ 20 20 Incorrect Demand is inelastic Correct in this range c. What price maximizes the firm’s...
Define what happens to revenue and why, when there is a price increase in a product...
Define what happens to revenue and why, when there is a price increase in a product that has a price elasticity of demand that is elastic, inelastic, and unity elastic. In your answer be sure to also explain what makes price elasticity of demand elastic, inelastic, and unit elastic.
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT