5. A firm learns that the own price elasticity of a product it manufactures is 3.5. What would be the correct action for this firm to take if it wishes to raise its total revenue?
- Raise the price because demand for the product is inelastic.
- Lower the price because demand for the good is elastic.
- We need information on the firm's cost structure in order to answer
this question.
- Raise the price because demand is elastic.
- Lower the price because demand is inelastic.
Copyright © 1995-2004 OnLineTexts.com, Inc. - All Rights Reserved