Will each of the following changes in price cause total revenue to increase, decrease, or remain unchanged?
a. Price falls, and demand is elastic.
b. Price rises, and demand is elastic
c. Price falls, and demand is unitary elastic.
d. Price rises, and demand is unitary elastic.
e. Price falls, and demand is inelastic.
f. Price rises, and demand is inelastic.
2007-02-26 02:57:33 · 3 answers · asked by mohotbabe 2 in Social Science ➔ Economics
a. Revenues increase. Since it is elastic, quantity will be greatly impacted by a change in price. If price goes down, quantity will go up by a larger percentage, increasing revenues.
b. Revenues decrease. Same reason as first, just reversed.
c. Revenues remain the same. % changes are equal.
d. Revenues remain the same. % changes are equal.
e. Revenues decrease. Quantity will change little if demand is inelastic. Change in price will be greater than change in quantity.
f. Revenues increase, for same reasons as in e.
2007-02-26 05:09:56 · answer #1 · answered by theeconomicsguy 5 · 1⤊ 0⤋
You sound like an economics student...most of America doesn't even know what you are talking about. You need to define such terms as "elastic", "unitary" and "demand", which have, I suspect, specialized meanings in the context of economics.
Good luck with your homework.
2007-02-26 12:13:01 · answer #2 · answered by cappi 3 · 0⤊ 0⤋
all will remain unchanged
2007-02-26 12:13:34 · answer #3 · answered by Anonymous · 0⤊ 0⤋