HomeworkLib
Question

If a business sees that demand for its product is –SELECT A LABELpopularelasticdecreaseperfectly elasticincreaseinelastic, it makes...

If a business sees that demand for its product is –SELECT A LABELpopularelasticdecreaseperfectly elasticincreaseinelastic, it makes sense to lower the price in order to –SELECT A LABELpopularelasticdecreaseperfectly elasticincreaseinelastic revenue. However, if demand is –SELECT A LABELpopularelasticdecreaseperfectly elasticincreaseinelastic, lowering the price will not increase revenue.

business   economics   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

If the business see that the demand for its product is elastic it makes sense to lower the price in order to increase revenue. However, if the demand is inelastic, lowering the price will not increase revenue.

Explanation: When demand is elastic, lowering price increases revenue and increasing the price lowers revenue. The opposite happens in the case of inelastic demand.

0 0
Add a comment
Know the answer?
Add Answer to:
If a business sees that demand for its product is –SELECT A LABELpopularelasticdecreaseperfectly elasticincreaseinelastic, it makes...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • sticity of demand for its ). What happens to Steven's Soup it increases the price of...

    sticity of demand for its ). What happens to Steven's Soup it increases the price of its canned soup? b. It falls by 162 percent. es by 1.62 percent. d. It rises. reduce your daily rates by 20 percent. However, y at you own a small boutique hotel. In an attempt to raise revenue you this indicate about the demand for your boutique hotel rooms y rates by 20 percent. However, your revenue falls. What does a. The demand curve...

  • If the price elasticity of demand for a product is 0.1 (ignoring the negative sign), to...

    If the price elasticity of demand for a product is 0.1 (ignoring the negative sign), to increase the total revenue from selling the product a rational business owner who has the ability to raise or lower or keep the price of the product the same would A. Leave the price unchanged B. Increase the price of a product C. Decrease the price of a product D. sometimes increase the price of the product and at other times lower the price...

  • 1. Jaime owns a monopoly business selling sweatshirts. The demand for her product is given by:...

    1. Jaime owns a monopoly business selling sweatshirts. The demand for her product is given by: Q = 2000 ‒ 15P. She is currently selling sweatshirts at P = $80. What is the price elasticity of demand when the price is P = $55? You will have to use the point elasticity formula. The price elasticity of demand at this price is ___________ A: -0.7 2. Consider your answer to the previous question. If Jaime wants to increase the revenue...

  • Select a product or service and discuss your subjective estimate of its price elasticity of demand....

    Select a product or service and discuss your subjective estimate of its price elasticity of demand. Is it highly elastic or inelastic, unitary elastic, etc.? Does it matter if you select a specific brand of a product, such as Kellogg's corn flakes, versus breakfast cereal or Exxon gasoline versus gasoline in general? What is the relationship between price elasticity and the effect on total revenue if the price of your product or service goes up or down?

  • 1. After a careful statistical analysis, the Franklin Company concludes the demand function for its product...

    1. After a careful statistical analysis, the Franklin Company concludes the demand function for its product is     Q = 16,784 – 232.43P + 0.225M – 895.3PR Where Q is the quantity demanded of its product, P is the price of its product, PRis the price of its rival product, and M is consumers’ per capita disposable income. At present, P = $22.50, PR = $12.50, and M = $43,499.       a. What is the price elasticity of demand...

  • Price Elasticity of Demand: Chippers Cookie Bakery Price Elasticity of Demand measurers how changed in a...

    Price Elasticity of Demand: Chippers Cookie Bakery Price Elasticity of Demand measurers how changed in a price affect the quantity of the product demanded. Specifically, it is the ratio of the percentage change in quantity demanded to the percentage change in price. In order to understand how to plan a successful pricing program, marketers must understand how elastic or inelastic the consumers are to changes in price. In other words, to what extent will a price increase or decrease result...

  • The price elasticity of demand for a product is -1.00. You know that... a. Sales Revenue...

    The price elasticity of demand for a product is -1.00. You know that... a. Sales Revenue ("Total Revenue") will increase if we raise the price. b. Sales Revenue ("Total Revenue") will increase if we lower the price. c. Sales Revenue ("Total Revenue") is maximized. It will fall if we change the price at all. d. Not enough information to answer this question.

  • Say a monopolist knew that at the current price for its product demand is inelastic. If...

    Say a monopolist knew that at the current price for its product demand is inelastic. If marginal costs for this firm are zero, then in order to maximize profits this monopolist should A increase output. reduce output. keep output at the same level. D decrease its price.

  • You own a small business and want to increase the total revenue you collect from sales...

    You own a small business and want to increase the total revenue you collect from sales of your product. If the demand for your product is inelastic, you should _____________ (increase/decrease/not change) your product's price in order to increase total revenue.

  • Bell's product manager continues to perform well in the market. However, a competing product is coming...

    Bell's product manager continues to perform well in the market. However, a competing product is coming on strong and is looking to take over as the market share leader in the segment. Without sacrificing contribution margin, what can the Bell product manager do in order to improve upon the buying criteria, and thus potentially increase demand? Select: 1 Increase MTBF by 2000 Lower the selling price since it is the second most important buying criteria Increase the promotion budget to...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT