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Projected Effects of Different Prices on Sales Increased Price or Increased Sales? An increase in the price of an item may not produce an increase in sales revenue. Price per Item X Quantity Soid Sales Reveue $50 200 $10,000 $45 250 $11,250 $40 280 $11,200 $35 325 $11,375 $30 400 $12.000 $25 500 $12,500 Explain why an increase in price does not always mean an increase in revenue,

Projected Effects of Different Prices on Sales Increased Price or Increased Sales? An increase in the price of an item may not produce an increase in sales revenue. Price per Item X Quantity Soid Sales Reveue $50 200 $10,000 $45 250 $11,250 $40 280 $11,200 $35 325 $11,375 $30 400 $12.000 $25 500 $12,500 Explain why an increase in price does not always mean an increase in revenue,

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Projected Effects of Different Prices on Sales Increased Price or Increased Sales? An increase in the price of an item may not produce an increase in sales revenue. Price per Item x Quantity Sold Sales Revenue $50 200 $10,000 $45 250 $11,250 $40 280 $11,200 $35 325 $11,375 $30 400 $12,000 $25 500 $12,500 Explain why an increase in price does not always mean an increase in revenue.
Transcribed Image Text:Projected Effects of Different Prices on Sales Increased Price or Increased Sales? An increase in the price of an item may not produce an increase in sales revenue. Price per Item x Quantity Sold Sales Revenue $50 200 $10,000 $45 250 $11,250 $40 280 $11,200 $35 325 $11,375 $30 400 $12,000 $25 500 $12,500 Explain why an increase in price does not always mean an increase in revenue.
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The change in price and change in total revenue is dependent on the price elasticity of demand. If the price elasticity of demand is less than one (inelastic demand) then due to an increase in price the total revenue will increase and vice-versa.

If the price elasticity of demand is more than one (elastic demand) then due to an increase in the price the total revenue will decrease and vice-versa.

 

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