CFA Practice Question

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CFA Practice Question

Hal sells tennis shoes. Hal wants to increase his revenues, so he raises his prices. This strategy will only work if demand is ______.

A. unitary elastic
B. elastic
C. inelastic
Correct Answer: C

This strategy will only work if the demand for tennis shoes is relatively inelastic. In this case, Hal will not lose very many sales if the price increases.

User Contributed Comments 1

User Comment
ridone this is only a short term solution
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