question archive Amazon allows authors who self-publish their e-books to set the prices they charge
Amazon allows authors who self-publish their e-books to set the prices they charge
Subject:EconomicsPrice:2.88 Bought3
Amazon allows authors who self-publish their e-books to set the prices they charge. One author was quoted as saying: "I am able to drop prices and, by sheer volume of sales, increase my income." Was the demand for her books price elastic or price inelastic? Briefly explain.
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In this example, the author is referring to elasticity by the total revenue method. If you lower the price and your total revenue increases, your product exhibits elastic demand. If your product shows inelastic demand and you lower the price, you will most likely only reduce your revenue.
