increase
When Demand is perfectly elastic, Marginal Revenue is identical with price.
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.
elastic
when price changes it is called inelastic demand and when quantity of demand change that is called elastic of demand.
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)
When Demand is perfectly elastic, Marginal Revenue is identical with price.
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.
elastic
when price changes it is called inelastic demand and when quantity of demand change that is called elastic of demand.
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)
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.
Either elastic or inelastic
For any given change in the price(rise or fall), where demand is elastic there is a more than proportionate change in quantity demanded. When the price elasticity of demand for a good is elastic (|Ed| > 1), the percentage change in quantity demanded is greater than that in price. Hence, when the price is raised, the total revenue of producers falls, and vice versa.
A)
b lose revenue
When a product is elastic, it means that changes in its price lead to significant changes in demand. If a product is elastic, a small increase in price will result in a large decrease in demand, and vice versa. This can impact pricing because businesses may need to adjust prices carefully to maintain sales volume and revenue.
elastic