Question

For each of the following situations, state whether total revenue received by the seller increases, decreases, or does not change. Type your answer in the blank space provided. Your answers should be increase, decrease, or does not change. a) If price elasticity of demand is -1.00 and price increases, total revenue b) If price elasticity of demand is -1.9 and price increases, total revenue c) If price elasticity of demand is -0.18 and price increases, total revenue d) If price elasticity of demand is -6.7 and price decreases, total revenue e) If price elasticity of demand is -0.43 and price decreases, total revenue

For each of the following situations, state whether total revenue received by the seller increases, decreases, or does not change. Type your answer in the blank space provided. Your answers should be increase, decrease, or does not change.

a) If price elasticity of demand is -1.00 and price increases, total revenue

b) If price elasticity of demand is -1.9 and price increases, total revenue

c) If price elasticity of demand is -0.18 and price increases, total revenue

d) If price elasticity of demand is -6.7 and price decreases, total revenue

e) If price elasticity of demand is -0.43 and price decreases, total revenue

Answer 1

Page no. of demand Then.. Therefore Elastic (31) % Din Qa A given% ris Lisz%A Lin P will in P b more than offset by a larger % fall Total Revenue Lys in Qd I is equal to % on I en p. . Unitary (=1 A given? rise in Purul be exactly offset by an I equal to fall in a so TR is unchanged. Inelastic / in / - Qd C. rise in P 1 %D enf. will cause a smaller I fall on HQ so TR rises. using these miles, we can answer the following question My NoteBook

Page no. le unitari (a) L Ep =(-1 @ price oneral Revenue - Total Revenue remanis unchanged 6 Epe t1,9 ire. Elastic 1 Price Increass, Total revenue falls / decreases o Ep = 0.18 ie. Indlastic Price Increams, Total Revenue rises increass. & Ep = 6.7 i.e. Highly Elastic / e Price Decreases ² Total Revenue increases becaus a small decline in price would caux a very high increase in quantity demanded and here Total Revenue encreass. Ep = (-) 0.43 ie. Indlastic Price Decreases Total Revenue decreases. Becaun the demand isi enelastic and home a decline in price I would not cause much encorean in quantity demanded and Notebook horée Tokal Revenue falls.