The price elasticity of demand for a good is calculated as 1.36. From this elasticity co-efficient, we can tell that: (2) (1) The good is not a necessity; (2) The good has many close substitutes; (3) Producers can increase total revenue by decreasing the price of the good; (4) Statements 1, 2 and 3 are all correct
The price elasticity of demand for a good is calculated as 1.36. From this elasticity co-efficient, we can tell that: (2) (1) The good is not a necessity; (2) The good has many close substitutes; (3) Producers can increase total revenue by decreasing the price of the good; (4) Statements 1, 2 and 3 are all correct
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter3: Demand Analysis
Section: Chapter Questions
Problem 2E: The price elasticity of demand for personal computers is estimated to be 2.2. If the price of...
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The
co-efficient, we can tell that:
(2)
(1) The good is not a necessity;
(2) The good has many close substitutes;
(3) Producers can increase total revenue by decreasing the price of the good;
(4) Statements 1, 2 and 3 are all correct.
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