Suppose that the price of cotton has increased from AED 100 per kilo to AED 150 per kilo. Suppose that the quantity demanded of this cotton was 450,000 tons in the market of cotton and after changing the prices of cotton this quantity is changed to 200,000 tons. 1- Calculate the PED (price elasticity of demand) ( 2- Is the demand in this market elastic or not? And why? 3- To increase the revenue of the seller, is it better to increase the price or decrease it? and why?

Suppose that the price of cotton has increased from AED 100 per kilo to AED 150 per kilo. Suppose that the quantity demanded of this cotton was 450,000 tons in the market of cotton and after changing the prices of cotton this quantity is changed to 200,000 tons. 1- Calculate the PED (price elasticity of demand) ( 2- Is the demand in this market elastic or not? And why? 3- To increase the revenue of the seller, is it better to increase the price or decrease it? and why?

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter5: Elastic And Its Application

Section: Chapter Questions

Problem 6PA: Suppose that your demand schedule for DVDs is as follows: Price Quantity Demanded (income = 10,000)...

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