Final answer:
The price elasticity of demand for fresh fish is inelastic because the percentage decrease in quantity demanded is smaller than the percentage increase in price. As a result, the total revenue from fresh fish sales will increase.
Step-by-step explanation:
To determine the price elasticity of demand for fresh fish, we can use the given percentages. The elasticity is calculated by taking the percentage change in quantity demanded divided by the percentage change in price. Since the quantity demanded decreases by 5 percent when the price increases by 10 percent, the elasticity is -5% / 10%, giving us -0.5. This indicates that the demand for fresh fish is inelastic, as the absolute value of elasticity is less than 1.
Since demand is inelastic, a 10 percent increase in price would lead to a smaller (5 percent) decrease in quantity demanded, meaning total revenue from fresh fish sales will increase. This happens because the proportional decrease in quantity demanded is less than the proportional increase in price, resulting in higher overall revenue.