Question

An accountant increases the price he charges for his services by 16 percent. In​ response, the demand for his services decreases by 14 percent. Will the​ accountant's revenue from his accounting services​ increase, decrease, or remain​ unchanged? The​ accountant's reve

Answer 1

Answer:

The total revenue will increase.

Explanation:

An accountant increases the price the charges for his services by 16 percent.

The demand for his services decreases by 14 percent.

This shows that demand is inelastic. A proportionate change in the price of a product is causing a less than proportionate change in its quantity demanded.

So the total revenue will increase as demand is not declining as much as the increase in price.