Answer to Question #64192 in Microeconomics for Saifa Sodhi

Question #64192
Compute the price elasticity of demand if price increases from $10 to $12 and quantity demanded falls from 600 to 400. Use the value obtained and a specific example to determine whether price must be increased or decreased to increase total revenue. Explain why. Note: Explain only how to increase total revenue, not decrease it.
1
Expert's answer
2016-12-16T06:17:10-0500
E p =((400-600)/600)/((12- 10)/10)=-1.666

Using this particular case that an increase in price, the quantity demanded falls, and a total

income falls, it is to increase its own income should be reduced at this equilibrium price

elasticity of the price.

Need a fast expert's response?

Submit order

and get a quick answer at the best price

for any assignment or question with DETAILED EXPLANATIONS!

Comments

No comments. Be the first!

Leave a comment

LATEST TUTORIALS
New on Blog
APPROVED BY CLIENTS