Answer to Question #70632 in Microeconomics for nouga
percent, we can predict that
please i need help and explanation for the answer
Price elasticity of demand is the relative change in quantity demanded given a one percent change in the price.
If the price of a good rises by 10 percent and quantity demanded falls by 20 percent the value of the price elasticity will be
It means that one percent change in price stipulates 2% decrease in quantity demanded by consumers, and that the demand for this good is quite elastic |E_((p)) |>1.
We can predict that the total revenue (TR) of the firm, that produces / sells the good will decline
After the changes:
So the total revenue (TR) of the firm will decline by 12% (10.88).
Need a fast expert's response?Submit order
and get a quick answer at the best price
for any assignment or question with DETAILED EXPLANATIONS!