If a firm wanted to know whether the demand for its product was elastic, unit-elastic, or inelastic, then the firm could change price a little bit and observe what happens to total revenue. not do anything as there is no way to find an elasticity value. survey competitors and ask them what they think demand elasticity is for the product. talk to its customers.

Answered: If a firm wanted to know whether the…

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter5: Price Elasticity Of Demand And Supply

Section: Chapter Questions

Problem 10SQ: Along a segment of the demand curve where the price elasticity of demand is less than 1, a decrease...

See similar textbooks

Related questions

Question

If a firm wanted to know whether the demand for its product was elastic, unit-elastic, or inelastic, then the firm could

		change price a little bit and observe what happens to total revenue.
		not do anything as there is no way to find an elasticity value.
		survey competitors and ask them what they think demand elasticity is for the product.
		talk to its customers.

Expert Solution

Step 1

Elasticity and revenue are related.

If a good has low elasticity, an increase in price increases total revenue

If the good has high elasticity, a decrease in price increases total revenue

If the good has high elasticity, an increase in price decreases total revenue

If the good has a unit elasticity, total revenue does not change with a change in price.

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions