If a firm currently sells a product at a point where the price elasticity of demand is 0.5, the firm needs to raise the price to maximize its total revenue.

Name: If a firm currently sells a product at a point where the price elasticity of demand is 0.5, the firm needs to raise the price to maximize its total revenue.
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Question

Quizplus · Accepted Answer

When the price elasticity of demand is less than 1 (inelastic), increasing the price will lead to an increase in total revenue.

If a Firm Currently Sells a Product at a Point