Which of the following sellers will achieve their desired result for total revenue?
A)A pharmacy raises the price of its store-brand pain medication in order to raise revenue from sales. The store-brand medication has many brand-name substitutes.
B)A florist raises the price of roses before and on Valentine's Day and hopes to raise total revenue. The florist is the only flower shop in town.
C)An airline maintains higher prices in the hopes of maintaining sales. However, a new low-cost competing airline has just entered the market.
D)In a market with a relatively inelastic demand curve, a coffee shop lowers coffee prices in the hopes of raising total revenue.

Question

Quizplus · Accepted Answer

The florist is the only flower shop in town, so there are no substitutes for their product. By raising the price of roses on Valentine's Day, they can take advantage of the high demand and capture a larger portion of the market, leading to an increase in total revenue. The other choices may not result in an increase in total revenue as they are either facing competition or have substitutes readily available.

Which of the Following Sellers Will Achieve Their Desired Result