Solution Found!
A price change causes the quantity demanded of a good to
Chapter , Problem 4(choose chapter or problem)
A price change causes the quantity demanded of a good to decrease by 30 percent, while the total revenue of that good increases by 15 percent. Is the demand curve elastic or inelastic? Explain
Questions & Answers
QUESTION:
A price change causes the quantity demanded of a good to decrease by 30 percent, while the total revenue of that good increases by 15 percent. Is the demand curve elastic or inelastic? Explain
ANSWER:Step 1 of 2
Every company decides to increase the total revenue, for which they often consider the price elasticity because if they change the prices based on the price elasticity, the total revenue will change. Companies that use this measurement to build proper strategies for increasing the total revenue tend to develop a greater probability of sustaining in the market.