PED and total revenue Flashcards
1
Q
why is PED important for a business?
A
It is crucial for a business, when making pricing decisions to increase their total revenue (pxq)
2
Q
When does a business know their demand for a good is price-elastic or price-inelastic?
A
Elastic
opposite
inelastic
same
3
Q
When the business knows that their demand is price elastic for a good, what will happen to the price and total revenue?
A
Price will rise and total revenue will decrease/ price will decrease and total revenue will rise.
4
Q
When a business knows that their demand is price-inelastic for a good, what will happen to the price and total revenue?
A
Price will increase and total revenue will increase/ price will decrease and total revenue will decrease-the same happens.
