Post Utme Veritas University 2020 Commerce Question 26

Practice objective / multiple choice question 26 from the 2020 Post Utme Veritas University Commerce examination.

Post Utme Veritas University 2020 Commerce Objective / Multiple Choice
Question 26 POST_UTME_VERITAS_UNIVERSITY • 2020 • COMMERCE • objective

In a perfectly competitive market, the supply curve is upward-sloping because firms are willing to produce more only if they can sell their output at a higher price. Which of the following best describes the relationship between the price elasticity of demand and the firm's ability to increase its profit?

Answer Options

A. If demand is inelastic, the firm can increase its profit by raising its price.
Correct Answer B. If demand is elastic, the firm can increase its profit by lowering its price.
C. If demand is inelastic, the firm cannot increase its profit by changing its price.
D. If demand is elastic, the firm cannot increase its profit by changing its price.
Correct Answer
B
Correct Option:
If demand is elastic, the firm can increase its profit by lowering its price.

About This Question

This is Post Utme Veritas University 2020 Commerce Question 26. It is one of the objective questions from the 2020 Post Utme Veritas University Commerce examination.

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