0
How inelastic demand has implications for pharmaceutical company price setting and revenue?
Inelastic demand for pharmaceuticals means that consumers are less sensitive to price changes; they will continue to purchase medications even if prices rise. This allows pharmaceutical companies to set higher prices without significantly reducing sales volumes, potentially leading to increased revenue. However, it also raises ethical concerns about access to essential medications and can lead to scrutiny from regulators and the public. Consequently, while inelastic demand enhances profitability, it also necessitates careful consideration of pricing strategies and their broader societal impact.
What else can I help you with?
What is the relationship between price elasticity of demand and the monopolist's revenue?
marginal revenue is negative where demand is inelastic
When is demand inelastic?
When a reduction in price results in a decrease in total revenue.
A price decrease will cause total revenue to fall if?
demand is inelastic
When the price of a product rises and the total revenue of sellers increase?
You have an inelastic product.
A price cut will increase the revenue a firm receives if the demand for its product is?
Either elastic or inelastic
What happens to total revenue when prices fall and demand is price inelastic?
Inelastic demand means that the demand changes very little as the price rises or falls. If prices drop and people don't buy any more of the item, total revenue declines.
If a price change causes the quantity demanded of a good to decrease by 30 percent while total revenue of that good increases by 15 percent is the demand curve elastic or inelastic?
inelastic
Why will the profit maximizing monopolist never operate on the inelastic portion of its demand curve?
A profit-maximizing monopolist will never operate on the inelastic portion of its demand curve because, in that range, increasing the price leads to a decrease in total revenue. Since demand is inelastic, a price increase results in a proportionally smaller decrease in quantity demanded, causing total revenue to fall. To maximize profit, the monopolist will only produce where demand is elastic, where price increases would lead to higher total revenue. Thus, operating on the inelastic portion would be counterproductive to profit maximization.
What is The Total Revenue Rule?
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.
When the price of a good will cause total revenue to fall if price elasticity of demand is elastic or inelastic?
when price changes it is called inelastic demand and when quantity of demand change that is called elastic of demand.
In order for a price decrease to increase revenue which of the following must be true A. Demand must be elastic B. Demand must be inelastic. C. Demand must be unit elastic D. Supply must be inelastic?
A)
(a)Which of the following is true (A)A monopolist produces on the inelastic portion of its demand. (B)A monopolist always earns an economic profit. (C)The more inelastic the demand the closer marg?
(A) A monopolist produces on the inelastic portion of its demand. This is true because a monopolist maximizes profit where marginal revenue equals marginal cost, and inelastic demand allows the monopolist to raise prices without losing too many customers. However, (B) is not necessarily true, as a monopolist can incur losses in the short run, and (C) is incomplete, but typically, the more inelastic the demand, the closer marginal revenue will be to price.
