The manager of a company notices that the company's total revenue would increase if she raised the price of the company's product. Accordingly, the manager can assert that the demand for the company's product is:
A) elastic.
B) inelastic.
C) unit elastic.
D) perfectly elastic.

Question

Quizplus · Accepted Answer

If the manager increases the price and sees the total revenue increase, it indicates that the demand for the product is inelastic. This means that even with an increase in price, consumers are willing to continue purchasing the product. If the demand were elastic, an increase in price would lead to a decrease in total revenue as consumers would switch to other substitute products.

The Manager of a Company Notices That the Company's Total