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31 January, 12:34

What is the impact of an increase in worker productivity when demand is relatively more elastic? A. An increase in sales revenue received by the firm. B. A small increase in the price received by the firm. C. A large increase in the price received by the firm. D. A decline in sales revenue received by the firm.

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  1. 31 January, 15:36
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    A) An increase in sales revenue received by the firm.

    Explanation:

    If worker productivity increases, the total output produced by the company will increase while the average cost per unit produced will decrease. This should result in a rightward shift of the supply curve that decreases the product's price at every level of quantity demanded. Since the demand is elastic, a small decrease in price will result in a larger increase in quantity demanded.
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