12) PED And Revenue

Question 0

➡️If the price was at £10 and the quantity is 250
Whats the revenue

➡️If the price decreased by £1 to £9
And the quantity is 300
Whats the new revenue

Whats the conclusion

Answer 0

➡️Revenue=price X Quantity
10x250=2500

➡️9X300=2700
Total revenue increased by 200

➡️firm should cut prices to increase revenue
Get lots of new customers

Question 1

Whats the formula for calculating revenue

Answer 1

Price X quantity

Question 2

If the price increases, what would happen to the revenue, if demand is price elastic

Answer 2

Revenue is decrease

Question 3

If the price decreases, what would happen to the revenue, if demand is price elastic

Answer 3

Revenue increases

Question 4

If the price increases, what would happen to the revenue, if demand is price inelastic

Answer 4

Revenue is increase

Question 5

If the price decreases, what would happen to the revenue, if demand is price inelastic

Answer 5

Revenue decreases

Question 6

Describe the varies of price elasticity along the length of a straight demand curve

Answer 6

⚫️cuts price axis
➡️infinity
➡️price elastic

⚫️halfway between the line
➡️unitary
➡maximised revenue

⚫️cuts quantity axis
➡️price inelastic
➡️0-1