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18 March, 20:51

If cigarette manufacturers raise prices, will their revenue increase or decrease? Briefly explain. If manufacturers raise prices, then their revenue will

A. increase because the percentage increase in price will be larger than the percentage decrease in quantity.

B. decrease because quantity will decrease.

C. remain unchanged because quantity will decrease as price increases.

D. decreasedecrease because the percentage increase in price will be largerlarger than the percentage decrease in quantity.

E. increase because price will increase

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Answers (1)
  1. 18 March, 23:40
    0
    A

    Explanation:

    With inelastic demand, a X% increase in price will decrease quantity demanded by less than X%, therefore total revenue will increase.
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