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Author Question: A firm is currently producing in the inelastic portion of its demand curve. What course of action do ... (Read 25 times)

Metfan725

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A firm is currently producing in the inelastic 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 inelastic portion of its demand curve.
◦ Reduce price, because if it reduces price and demand is inelastic, total revenue will increase.
◦ Increase price, because if it increases price and demand is inelastic, 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 Metfan725 on Apr 19, 2019

kxciann

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Metfan725

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Reply 2 on: Apr 19, 2019
Great answer, keep it coming :)


vickybb89

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Reply 3 on: Yesterday
Gracias!

 

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