if the price elasticity of demand is -0.5, decreasing price will a. increase revenue b. keep...

Question

Question

if the price elasticity of demand is -0.5, decreasing price will

a. increase revenue

b. keep revenue the same

c. decrease revenue

d. cannot be determined without more information

Answer 1

Answer #1

c. Decrease in revenue.

The price elasticity is less than 1, which means it is inelastic. If a firm lower the price, revenue will decrease.

Answer 2

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