AEM 240 10.24.07 - Elastic products say On Sale more! Many...

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AEM 240 10/24/07 Estimating Demand and Revenue MR is below Demand curve (is 2x the slope of demand) MR is the marginal revenue from the sale of one additional unit of that product TR= P x Q MR= ^TR/^Q Demand= downward sloping When you lower price more sales (dk if more profit) Inelastic products have elasticity less than 1
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Unformatted text preview: Elastic products say On Sale more! Many firms have sales just to show they have low priced goods on goods that no one buys Price Change: Cheaper: Inelastic (TR up) Elastic (TR down) More Expensive: Inelastic (TR down) Elastic (TR up)...
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This note was uploaded on 12/03/2007 for the course AEM 2400 taught by Professor Mclaughlin,e. during the Fall '07 term at Cornell University (Engineering School).

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