Homework Answers
Answer : The answer is option A.
Here the elasticity of demand is 0.5 which is less than 1. If the elasticity of demand is less than 1 then the demand is inelastic. So, here the demand is inelastic. In case of inelastic demand if price rise then the total revenue increase. As here the demand is inelastic hence if the firm increase the price level then the firm's "total revenue will increase". therefore, option A is correct.
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