A few years ago, the United State Postal Service commissioned a study into the price elasticity of demand for postage stamps. The study found that own price elasticity of demand is relatively inelastic. If that is the case, how will the United State Postal Service’s revenue change if they increase the price of stamps? A) Increasing the price of stamps will increase revenue
A few years ago, the United State Postal Service commissioned a study into the price elasticity of demand for postage stamps. The study found that own price elasticity of demand is relatively inelastic. If that is the case, how will the United State Postal Service’s revenue change if they increase the price of stamps? A) Increasing the price of stamps will increase revenue
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
A few years ago, the United State Postal
Service commissioned a study into the
stamps. The study found that own price
elasticity of demand is relatively inelastic.
If that is the case, how will the United
State Postal Service’s revenue change if
they increase the price of stamps?
A) Increasing the price of stamps will increase revenue
B) Increasing the price of stamps will decrease revenue
C) Increasing the price of stamps will not
change revenue
D) There is not enough information to say
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