Suppose that the price elasticity of the demand is 0.76. If we increase the price of the the demanded product, how would this affect the revenue? Explain
5. Suppose that the
the the demanded product, how would this affect the revenue? Explain
The quantity demanded of a good or service divided by the percentage change in price is the price elasticity of demand. The percentage change in quantity supplied divided by the percentage change in price represents the price elasticity of supply. Elastic, inelastic, and unitary elasticities fall into these three major types. If the elasticity is greater than one, it means that the demand is very responsive to price fluctuations. Elasticities below one indicate low price responsiveness and are associated with inelastic demand. The proportionate responsiveness of either supply or demand is means unitary elasticities.
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