Answer to Question #65048 in Microeconomics for erucha

Question #65048
How knowledge of price elasticity of demands magnitude can be of use to a business firm contemplating a price increase?
1
Expert's answer
2017-02-05T11:45:13-0500
If demand is inelastic then increasing the price can lead to an increase in revenue. On the other hand, If demand is elastic then increasing the price can lead to an decrease in revenue.

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