Suppose That a Coffee Shop Faces a Demand Curve That

Suppose that a coffee shop faces a demand curve that is liner and that the current price for its cup of coffee is set at a point where the price elasticity is 1.2.If the local dry cleaner shop increases the price per garment:

A) the demand becomes more elastic and the total revenue decreases.
B) the demand becomes less elastic and the total revenue decreases.
C) the demand becomes less elastic and the total revenue increases.
D) the demand becomes more elastic and the total revenue increases.

Correct Answer:

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