(a) Let p be the price and q be the quantity sold of a good with a high elasticity of

Chapter 4, Problem 18

(choose chapter or problem)

(a) Let p be the price and q be the quantity sold of a good with a high elasticity of demand, E. Explain intuitively (without formulas) the effect of raising the price on the revenue, R. (b) Derive an expression for dR/dp in terms of q and E. Show all the steps and reasoning. (c) Explain how your answer to part (b) confirms your answer to part (a).

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