2011-10-02 22-37-00 20

2011-10-02 22-37-00 20 - e P“ Tan 9 e if Q— Defmition...

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Unformatted text preview: e P“? Tan, 9 . e if Q— Defmition of market: The more narrowly we define a market, the more elastic demand will be. Share of the good in the consumer’s budget: The demand for a good will be less elastic the smaller the share of the good in the average consumer’s budget. Total Revenue: The total amount of funds received by a seller of a good or service, calculated by multiplying price per unit by the number of units sold. V R Q Relationship between price elasticity and total revenue: 0 If demand is We in price reduces revenue because the decrease in quantity demanded is proportionally greater than the increase in price. a If demand is elastic en a decrease in rice increases revenup because the increase in quantity demanded is proportionally greater than the decrease in price. 0 If demand_is ' ' en an increase ' ’ e increases revenue because the decrease in .-\___.___—___-—3’ quantity demanded is proportionally smaller than the increase in price. 0 If demand is W reduces revenue because the increase in quantity demanded is proportionally smaller than the decrease in price. 0 If demand is unit elastic ' in rice does not afiect revenue because the decrease in quantity demanded is proportionally the same as the increase in price. ' If “mm is W because the increase in quantity demanded is proportionally the same as the decrease in price. -_.___.___._‘_.—____.—.. fi____._.____..___ _—__ . . MWW_M—-—_—_—A-‘--__-__._ __._ __ __-_____-_ _ _ ...
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