Homework Answers
Option B.
If a firm decreases its price and if its total revenue also falls
it means that the firm's good is facing an inelastic demand as
changes in price does not have much affect on the goods demand.
Therefore, we can consider the good as price inelastic and goods with an inelastic demand faces a value less than 1.
Hence, a possible value of its price elasticity of demand is 0.4.
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