Suppose Carol's Candid Cameras wants to increase its total revenue. If the firm lowers the price of cameras by 2 percent, Carol must be predicting that the quantity
A) supplied will increase by more than 2 percent.
B) demanded will increase by more than 2 percent.
C) demanded will decrease by less than 2 percent.
D) supply will decrease by less than 2 percent.

Question

Quizplus · Accepted Answer

To increase total revenue by lowering prices, Carol must expect that the demand is elastic, meaning the quantity demanded will increase by more than the percentage decrease in price.

Suppose Carol's Candid Cameras Wants to Increase Its Total Revenue