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A price cut will increase the revenue a firm receives if the demand for its product is?
Wiki User
∙ 12y ago
Either elastic or inelastic
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.
Inelastic demand curve?
Inelastic demand means a situation in which the demand for a product does not increase or decrease correspondingly with a fall or rise in its price. From the supplier's viewpoint, this is a highly desirable situation because price and total revenue are directly related; an increase in price increases total revenue despite a fall in the quantity demanded. An example of a product with inelastic demand is gasoline. Refer to link below.
If marginal revenue product capital increases the demand or supply curve?
Demand.
If a price increase has little or no effect the demand for the product is?
When a price increase has little or no effect on the demand for a product, it is inelastic.
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.
Inelastic demand curve?
Inelastic demand means a situation in which the demand for a product does not increase or decrease correspondingly with a fall or rise in its price. From the supplier's viewpoint, this is a highly desirable situation because price and total revenue are directly related; an increase in price increases total revenue despite a fall in the quantity demanded. An example of a product with inelastic demand is gasoline. Refer to link below.
Supply has the potential to contribute to what?
Supply has the potential to contribute to demand. When a product is highly demanded, but the supply is low, a producer can increase their price. This process will increase revenue for the business.
If marginal revenue product capital increases the demand or supply curve?
Demand.
If a price increase has little or no effect the demand for the product is?
When a price increase has little or no effect on the demand for a product, it is inelastic.
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.
If demand is elastic and price is lowered total revenue will?
increase
What is the importance of elasticity of demand and supply?
Elasticity of demand to firms are important because they represent the nature of the goods they are dealing in. For example if a firm produces goods with inelastic demand they will be able to earn high profits because even if they increase the price of the goods, since the change in demand will be less than the change in price. Also if there is a tax they will share less of the burden. This means they can keep prices high and not have to worry about a lot of things. However, if a firm were to produce goods with elastic demand, then they will have to make sure the price of the good remains low and if there is a tax they will be the ones who share the majority of the burden.
What is stagnant demand?
Stagnant demand is when there is little to no increase in the demand for a certain product or service
What is an increase in demand likely to lead to?
If there is an increase in demand, there will be increase in the price of the product if the supply remains the same. But if the manufacturer or supplier is able to supply increased quantity of product there will be no major effect.
How does a change in price on a linear demand curve affect total revenue?
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.
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.
