Suppose the Government as a monopolist firm produces electricity and sells it to people at price per...........

Economics-I Mathematical Methods in Economics

Suppose the Government as a monopolist firm produces electricity and sells it to people at price per unit 'p'. The demand function for the electricity, of the people is $\small q = \alpha p^{-\beta }$ ? . If the elasticity of demand for electricity in absolute sense is found to be 0·894, should the Government increase the price per unit to increase the revenue? Justify your answer . (75 words) (5 Marks)