Question: If demand is elastic, how will an increase in price change total revenue? Explain and give an example.
My Answer: If demand is elastic, namely price elasticity of demand is greater than 1, when the price rises, the total revenue will decrease. For example, LV handbag, when its price rises, the quantities of its buyers will decrease. Because LV handbag is a luxury, so its demand elasticity is great than 1, from that, we know the decrease rate of buyers is greater than the increase rate of price. And the total revenue is price to multiply quantity. Now we can draw a conclusion that if demand is elastic, when the price rises, the total revenue will decrease.作者: fisher 时间: 2008-1-4 22:50
会答题但是不会用英文答题的路过作者: virrie 时间: 2008-1-5 13:46