Homework Answers
Option C - an increase in price will increase revenue.
If the price elasticity of demand is -2.3, it means that your company's products are inelastic in nature i.e when the price changes, the demand for the product changes by a lesser proportion. So, in this case, an increase in the price will lead to a less proportion change in the quantity demanded. This will lead to an increase in revenue where we calculate revenue by, Revenue = Price * Quantity.
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