Answer to Question #320585 in Macroeconomics for Rose

Question #320585

If the price elasticity of demand is 1.6 and a firm increases the price of its

product by 10%, it would expect its total revenue to _____

A. decrease by 16%.

B. increase by 16%.

C. increase by 6%.

D. remain constant.

E. decrease by 6%.

Expert's answer

B. increase by 16%.

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