A firm would generally prefer that the price elasticity of demand for its product be inelastic. When demand is inelastic, consumers are less sensitive to price changes, meaning that if the firm raises its prices, the quantity demanded will not decrease significantly. This allows the firm to increase revenue because they can charge higher prices without losing many customers.
In contrast, if demand is elastic, consumers will reduce their quantity demanded significantly when prices rise. This means that higher prices could lead to a decrease in total revenue, as the loss in sales could outweigh the gain from higher prices. Therefore, inelastic demand is preferable for firms aiming to maximize profitability and maintain stable sales in the face of price variations.