How does elasticity affect a company's pricing policy?
(A) If demand is unitary elastic, the company knows that a decrease in price would decrease total revenues.
(B) If demand is unitary elastic, the company knows that an increase in price would increase total revenues.
(C) If demand is elastic at the current price, the company knows that an increase in price would reduce total revenues.
(D) If demand is inelastic at the current price, the company knows that an increase in price would reduce total revenues.
Ans: (C) If demand is elastic at the current price, the company knows that an increase in price would reduce total revenues.
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a. True b. False