"Higher prices always yield higher revenues." Do you agree or disagree? Why?
What will be an ideal response?
Disagree. Higher prices generate higher revenues if demand is inelastic but generate lower revenues if demand is elastic. The effect of a price change on revenues depends on whether demand is elastic or inelastic.
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Gross domestic product is the total dollar value at current prices of all final and intermediate goods produced by a nation during a given time period
a. True b. False Indicate whether the statement is true or false
The adaptive expectations hypothesis implies that people:
a. adjust their expectations quickly to policy changes. b. expect the next period to be pretty much like the recent past. c. will always be correct in their forecast for the next period. d. change their expectations about the future if policy changes.