If demand is inelastic, a change in the price

1.	If demand is inelastic, a change in the price
Answer» Will change total revenue in same direction If demand is INELASTIC, a change in the price will change total revenue in same direction. When demand is price inelastic, a given percentage change in price results in a smaller percentage change in quantity demanded. That IMPLIES that total revenue will MOVE in the direction of the price change: an increase in price will increase total revenue, and a reduction in price will REDUCE it.

Answer»

Will change total revenue in same direction

If demand is INELASTIC, a change in the price will change total revenue in same direction. When demand is price inelastic, a given percentage change in price results in a smaller percentage change in quantity demanded. That IMPLIES that total revenue will MOVE in the direction of the price change: an increase in price will increase total revenue, and a reduction in price will REDUCE it.

Discussion

No Comment Found

Related InterviewSolutions

In May 2013, firm was supplying 500kg of sugar at market price of Rs.30/- per kg. During June 2013, firm's supply of sugar had decreased to 450kg at price of Rs.20/- per kg. These changes show that supply of sugar is
In perfect competition, the firm's _____ above AVC has the identical shape of the firm's supply curve
Scarcity means
Economic profit is
A firm encounters its 'shutdown point' when
Under Marginal utility analysis, utility is assumed to be a
A higher indifference curve shows
Price discrimination will be profitable only if the elasticity of demand in different markets into which the total market has been divided is
For inferior commodities, income effect is
Elinor Ostrom and Oliver Williamson are the Nobel Prize Laureates in Economics in 2009. Do you know in which year was Francois Quesnay's Tableu Economique published?

If demand is inelastic, a change in the price

Discussion

No Comment Found

Related InterviewSolutions

Reply to Comment