elastic
yes
if a price cut decreases total revenue, demand is elastic. if a price cut decreases total revenue, demand is inelastic. if a price cut leaves total revenue unchanged, demand is unit elastic.
Because in Pure Competition, Demand equals Price, and Price equals Marginal Revenue;hence, Demand equals Marginal 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.
Price is inversely related to quantity demanded because as price rises, consumers substitute other goods whose price has not risen.
yes
if a price cut decreases total revenue, demand is elastic. if a price cut decreases total revenue, demand is inelastic. if a price cut leaves total revenue unchanged, demand is unit elastic.
Because in Pure Competition, Demand equals Price, and Price equals Marginal Revenue;hence, Demand equals Marginal revenue.
If something is in high demand but there is a limited supply of it then the price goes up. Kinda of like the price of gasoline. There isn't a limited supply and alot alot of people need it for their cars and other things etc so it drives the price. If there isn't a high demand for it then the price is generally reasonable. They are inversely related. Directly related is supply and demand.
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.
Price is inversely related to quantity demanded because as price rises, consumers substitute other goods whose price has not risen.
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)
marginal revenue is negative where demand is inelastic
This is in accordance to the Demand & Supply Theory... When the demand for a product is high and its supply is low, this usually causes the price of that commodity to increase Similarly when supply for a product is high and the demand for that product is low, it causes the price of that product to decrease. Hence the supply is inversely related to the price of any product (Provided the Demand is in accordance to the two points mentioned above)
on the linear demand curve, demand is elastic at price above the point of unitary elasticity so a price increase will decrease the total revenue.
When Demand is perfectly elastic, Marginal Revenue is identical with price.
Inversely with its price.