If a firm finds that its price elasticity of demand is equal to -0.5, a firm can expect that an increase in price will

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    increase total sales and revenue but the effect on profits is unknown.
     increase sales and profitability, as total revenue will rise and total costs will fall.
     decrease sales and total revenue but increase profitability, as total costs fall due to a lower quantity being produced.
     decrease sales, total revenue and profits as sales are lost due to the price increase.
asked Jun 2, 2013 in Economics by anonymous
    

1 Answer

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increase sales and profitability, as total revenue will rise and total costs will fall.
answered Jun 3, 2013 by Xyz ~Expert~ (3,650 points)



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