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You are the newly appointed sales manager of the Rock Record Company and have been charged with the task of increasing revenues. Your economics consultants have informed you that at present price and output
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You are the newly appointed sales manager of the Rock Record Company and have been charged with the task of increasing revenues. Your economics consultants have informed you that at present price and output levels, price elasticity of demand for your product is less than one. You should______________

User OneNeptune
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Answer:

increase the price of our products or services.

Step-by-step explanation:

When the price elasticity is less than 1 (inelastic), then an increase in the price of our products or services will result in a proportionally smaller decrease in the quantity demanded. Therefore, by increasing our prices, we can increase total revenue even if the quantity demanded decreases a little.

User Nabeel Ahmed
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