Answer to Question #283093 in Economics of Enterprise for danny

Question

price elasticity of a product is -0.8.if the firm raises price of the product,what happened to its revenue

Answer 1

Inelastic demand is demonstrated by a price elasticity of -0.8. Price and revenue are typically positively correlated when demand is inelastic. That is, an increase in price results in an increase in revenue, while a decrease in price results in a decrease in revenue.