Answer to Question #120070 in Macroeconomics for david opuni harrison

Question

With the aid of illustrations discuss the relationship between a firm’s total revenue curve and demand curve

Answer 1

1)When demand is inelastic_ a rise in price leads to a rise in total revenue.

2)When demand is elastic – a fall in price leads to a rise in total revenue.

3)When demand is perfectly inelastic(i.e. Ped = zero), a given price change will result in the same revenue change