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Assume that the price of elasticity demand is -2 for a certain firm's product If the firm raises price the firm's manager can expect total revenue to?
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∙ 12y ago
decrease
Wiki User
∙ 12y ago
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Conclusion of price elasticity of demand?
The conclusion of the price of elasticity of demand is the effect of price change based on the revenue it receives. It is based off the demand of the product and the price of the product.
How to use the concept of price elasticity of demand to maximize revenue?
Price elasticity of demand is a way to determine marginal revenue. Optimal revenue and, more importantly, optimal profit will occur to the point when marginal revenue = marginal cost, or the price elasticity of demand < 1.
How does elasticity of demand influence tax revenue?
Elasticity of demand influenced tax revenues
Importance of cross elasticity of demand?
Cross elasticity of demand is sometimes written as XED. In business the cross elasticity of demand is important because it will help determine whether or not it is a good move to increase or decrease prices or to substitute one product for another for the purpose of revenue.
Explain the effects of a rise in the price on market when the price elasticity of demand for product is inelastic?
Revenue of the producer will increase since there will be no change in quantity demanded.
Conclusion of price elasticity of demand?
The conclusion of the price of elasticity of demand is the effect of price change based on the revenue it receives. It is based off the demand of the product and the price of the product.
Demonstrate the Relationship between elasticity and totoal revenue?
how government use the elasticity concept to genrate revenue
How to use the concept of price elasticity of demand to maximize revenue?
Price elasticity of demand is a way to determine marginal revenue. Optimal revenue and, more importantly, optimal profit will occur to the point when marginal revenue = marginal cost, or the price elasticity of demand < 1.
How does elasticity of demand influence tax revenue?
Elasticity of demand influenced tax revenues
Importance of cross elasticity of demand?
Cross elasticity of demand is sometimes written as XED. In business the cross elasticity of demand is important because it will help determine whether or not it is a good move to increase or decrease prices or to substitute one product for another for the purpose of revenue.
Explain the effects of a rise in the price on market when the price elasticity of demand for product is inelastic?
Revenue of the producer will increase since there will be no change in quantity demanded.
What will be the elasticity when marginal revenue is zero?
unit elastic
What is the total revenue test for elasticity?
I assume that when you say "elasticity," you mean "price elasticity of demand."Raise price a little. If total revenue goes up, you're in the INELASTIC region (where absolute value of elasticity is greater than 1). If it goes down, you're in the ELASTIC region.
What is the relationship between price elasticity of demand and the monopolist's revenue?
marginal revenue is negative where demand is inelastic
WHAT are Uses of PRICE ELASTICITY OF DEMAND?
There are several uses of Price Elasticity of Demand that is why firms gather information about the Price Elasticity of Demand of its products. A firm will know much more about its internal operations and product costs than it will about its external environment. Therefore, gathering data on how consumers respond to changes in price can help reduce risk and uncertainly. More specifically, knowledge of Price Elasticity of Demand can help the firm forecast its sales and set its price.Sales forecasting: The firm can forecast the impact of a change in price on its sales volume, and sales revenue (total revenue, TR). For example, if Price Elasticity of Demand for a product is (-) 2, a 10% reduction in price (say, from $10 to $9) will lead to a 20% increase in sales (say from 1000 to 1200). In this case, revenue will rise from $10,000 to $10,800.Pricing policy: Knowing Price Elasticity of Demand helps the firm decide whether to raise or lower price, or whether to price discriminate. Price discrimination is a policy of charging consumers different prices for the same product. If demand is elastic, revenue is gained by reducing price, but if demand is inelastic, revenue is gained by raising price.Non-pricing policy: When Price Elasticity of Demand is highly elastic, the firm can use advertising and other promotional techniques to reduce elasticity.
How revenue method applied in calculating price elasticity of demand?
abc
Where does revenue comes from?
The revenue source depends on what product or service a certain business offers to the public community. As they continue to sell products and render service to clients that paid for it, they generate revenue from their patrons and use that revenue to improve their product and services - to gain more revenue in the next few days or months of their business on their target industry.
