Answer to Question #267382 in Economics for Esosmart

Question

How does ups and downs of commodity affect revenue derived from the sell of a commodity that have substituted, if the demand of that commodity is elastic and helastic.

Answer 1

If the demand of the commodity is elastic, then the increase in price will decrease total revenue and vice versa.

If the demand of the commodity is inelastic, then the increase in price will increase total revenue and vice versa.