INTRODUCTION TO ECONOMICS I (İKTİSADA GİRİŞ I) - (İNGİLİZCE) Dersi Elasticity, Government Policies and Market Efficiency soru detayı:

PAYLAŞ:

SORU:

Explain what happens
to revenue when the seller increases the price
of his/her product?


CEVAP:

Whether or not a price hike causes total revenue from sales to increase is determined by the price elasticity of demand. If the demand of the good that the seller sells is elastic, an increase in the price causes the total revenue to decrease. A decrease in price, in contrast, causes the total revenue to increase. On the other side, when the demand of the good is inelastic, an increase in price causes the total revenue to increase.