Economics 9708 · AS & A Level · Price elasticity of demand

Price elasticity of demand — practice question

The demand for a firm’s product is perfectly inelastic. What effect will there be on the firm’s revenue if it raises its price by 5%?

  • AIts revenue will be unchanged.
  • BIts revenue will increase by 5%.
  • CIts revenue will decrease by 5%.
  • DIts revenue will fall to zero.

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