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Question

A demand is price inelastic, which means?


A
An increase in price must raise profits
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B
An increase in price decrease revenue
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C
An increase in price increase revenue
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D
A decrease in price reduce sales
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Solution

The correct option is C An increase in price increase revenue
Inelastic demand is when a buyer's demand for a product does not change as much as its change in price
Hence, it leads to increase in revenue.
Thus, the correct option is C.

Maths

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