- CFA Exams
- CFA Level I Exam
- Topic 2. Economics
- Learning Module 8. Topics in Demand and Supply Analysis
- Subject 2. Elasticities of Demand
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 ______.
B. elastic
C. inelastic
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 |