Answer to Question #315156 in Microeconomics for nia

Question

discuss how businesses might attempt to change the price elasticity of demand for their products and consider which approach is most likely to be successful

Answer 1

The demand elasticity determines the maximum profit price and the sensitivity of profit with changing prices. The approach likely to be taken is either raise the price of a product, that in turn, increases profits per unit and decreases the number of units sold. On the other hand, decrease in price elasticity of demand for products because the more inelastic demand, the higher revenue gained as per increase in the price charged.