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Author Question: A firm is currently producing in the elastic portion of its demand curve. What course of action do ... (Read 65 times)

krzymel

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A firm is currently producing in the elastic portion of its demand curve. What course of action do you recommend for it assuming it wants to raise revenue?


◦ Continue producing at the current output level, because it maximizes its total revenue by producing in the elastic portion of its demand curve.
◦ Reduce price, because if it reduces price and demand is elastic, total revenue will increase.
◦ Increase price, because if it increases price and demand is elastic, total revenue will increase.
◦ Continue selling at the same price, but increase the amount it produces.


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Marked as best answer by krzymel on Apr 19, 2019

mcarey591

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