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How to use the concept of price elasticity of demand to maximize revenue?
Wiki User
∙ 12y ago
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.
Wiki User
∙ 12y ago
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How does elasticity of demand influence tax revenue?
Elasticity of demand influenced tax revenues
Why is the concept of price elasticity of demand potentially very uesful to a businss?
It can be used to calculate quantity sold to optimise profit, since the price elasticity of demand, multiplied by revenue, describes the total change in revenue (MR) per unit sold.
What is the relationship between price elasticity of demand and the monopolist's revenue?
marginal revenue is negative where demand is inelastic
Why is elasticity of demand a fine theoretical concept of economists but difficult for marketers to use in practice?
it is what elasticity of demand
How revenue method applied in calculating price elasticity of demand?
abc
What is the importance of price elasticity of demand in decision making with regards to choosing the best pricing strategy to maximize revenue?
Supply + Demand = Price
How does elasticity of demand influence tax revenue?
Elasticity of demand influenced tax revenues
Why is the concept of price elasticity of demand potentially very uesful to a businss?
It can be used to calculate quantity sold to optimise profit, since the price elasticity of demand, multiplied by revenue, describes the total change in revenue (MR) per unit sold.
What is the relationship between price elasticity of demand and the monopolist's revenue?
marginal revenue is negative where demand is inelastic
Why is elasticity of demand a fine theoretical concept of economists but difficult for marketers to use in practice?
it is what elasticity of demand
How revenue method applied in calculating price elasticity of demand?
abc
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.
Does the change in revenue link to the price elasticity of demand in any way?
not really
What is Elasticity of demand in steel industry?
Elasticity of demand in the steel industry is inelastic. The price of steel can fluctuate and the demand will remain constant. As a result, as price moves, revenue will move in the same direction.
What is meant by concept of elasticity of demand?
The degree of responsiveness of change in demand as a result of change in its price is known as elasticity of demand. I mathematical language we can say that; Elasticity of demand = %age change in Quantity Demanded DIVIDED BY %age change in the Price.
What questions is the price elasticity of demand designed to answer?
Price elasticity of demand is used to determine how changes in price will effect total revenue. If demand is elastic(>1) a change in price will result in the opposite change in total revenue.(+P=-TR) When demand is unit elastic(=1) a change in price wont change total revenue. If demand is inelastic a change in price will result in a change in total revenue in the same direction.(+P=+TR)
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.
