Asked by MATTANAPORN CHANTIYANON on Jul 26, 2024
Verified
How total revenue changes when a price changes can be predicted using price elasticity of demand.
Price Elasticity
An evaluation of the degree to which a change in the cost of a good influences the amount of it demanded.
Total Revenue
The total receipts from sales of a given quantity of goods or services; calculated as the unit price multiplied by the number of units sold.
- Become acquainted with the interaction between demand elasticity and total earnings.
- Apply the concept of elasticity to determine the impact of price changes on total revenue.
Verified Answer
ZK
Zybrea KnightAug 02, 2024
Final Answer :
True
Explanation :
Price elasticity of demand measures how much the quantity demanded of a good responds to a change in the price of that good, which allows for predictions on how total revenue will change with price adjustments.
Learning Objectives
- Become acquainted with the interaction between demand elasticity and total earnings.
- Apply the concept of elasticity to determine the impact of price changes on total revenue.
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