suppose he price elasticity of demand for youe economics textbook is -1. If the publishr raises...
suppose he price elasticity of demand for youe economics textbook is -1. If the publishr raises the price by 5% A. revenues will rise by 5% B. quantity demanded will rise 5% C. total revenues will not change D. revenues will fall
Homework Answers
Answer
Option C
C. total revenues will not change D
the elasticity is -1 means it is unit elastic the change in price is equal to change in quantity.
TR=P*Q
after change
TR=1.05P * 0.95Q=0.9975*(PQ)=1*TR
the revenue will not change.
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