Which of the following statements about prices and profit is true?
A)Higher prices always lead to lower profits because fewer units will be sold.
B)Higher prices always lead to lower demand and higher profits.
C)Higher prices combine with lower demand to change the level of profits.
D)Higher prices will be offset by lower demand so profits will stay constant.

Question

Quizplus · Accepted Answer

Higher prices may lead to an increase in profits if the increase in price is perceived to be due to higher quality, exclusivity, or other factors that increase the perceived value of the product. However, in most cases, higher prices typically result in lower demand. Therefore, the combination of higher prices and lower demand will impact the level of profits.

Which of the Following Statements About Prices and Profit Is