Answered: Total revenue is the product of price…

Principles of Microeconomics (MindTap Course List)

8th Edition

ISBN:9781305971493

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter5: Elastic And Its Application

Section: Chapter Questions

Problem 6CQQ: Over time, technological advance increases consumers incomes and reduces the price of smartphones....

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Total revenue is the product of price and quantity. Whether total revenue rises or falls depends on increase or decrease in price with their respective elasticities. You are required to find what happened to total revenue on each situation given below with help of graph?

i. Effects of price increase on a product with inelastic demand.

ii. Effects of price increase on a product with elastic demand.

iii. Effect of price cut on a product with elastic demand.

iv. Effect of price cut on a product with inelastic demand.

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