question archive 1)State true or false and justify your answer: When demand is inelastic, an increase in price will lead to an increase in total revenue for the product
1)State true or false and justify your answer: When demand is inelastic, an increase in price will lead to an increase in total revenue for the product
Subject:EconomicsPrice:2.88 Bought3
1)State true or false and justify your answer:
When demand is inelastic, an increase in price will lead to an increase in total revenue for the product.
2)
State true or false and justify your answer:
If the quantity demanded for good A increases from 40 to 60 when the price decreases from $9 to $7, the absolute value of the price elasticity of demand in this price range is 1.6.
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1)Usually, the inelastic demand causes the same movement between the price and total revenue when there is a price effect because-
1. Its elasticity < 1.
2. There are a few substitutes for that product.
3. Consumers consider that product as a necessary product.
Thus, it can be inferred that as the price increases, the total revenue will increase as the decline is quantity is very less.
2)please see the attached file for the complete solution.
