According to an economic consultant, For your firm, an increase in price is a win-win situation. Your total revenue will increase and your total cost will decrease. Therefore, you ll earn more profit (equal to Total Revenue Total Cost).
a. Concerning the revenue effect of a price hike, what is the consultant assuming about your firm and its customers?
b. Concerning the cost effect of a price hike, what is the consultant assuming about your firm and its customers?