- Describe the relationship between elasticity and total revenue when considering an increase in
price .
You are the manager of a train company. Recently total sales have been a bit low and you are now considering means to give sales a boost.
2. One of your colleagues has suggested that it is important to lower the price of train tickets. In that case, she argues, the demand will increase. Do you agree with her? Explain why.
3. She continues her argument by concluding that if the demand goes up, the total value of sales of train tickets should therefore increase. Do you agree with her? Explain why.
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