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assume that you are selling a product for which the cost of production are zero and...

assume that you are selling a product for which the cost of production are zero and hence profit = total revenue. which reference to the price elasticity of demand, what price will you charge for your product?

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Answer #1

If the price elasticity of demand is less than 1, then increase in price lead to an increase in revenue and If the price elasticity of demand is more than 1, then increase in price lead to decrease in revenue and therefore the price of the product must be set when the price elasticity of demand should be equal to 1 all in all.

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