Th1.2: PED and Revenue

Question 1

For an elastic demand curve:

Answer 1

a decrease in price leads to an increase in revenue and vice versa

Question 2

For an inelastic demand curve:

Answer 2

a decrease in price leads to a decrease in revenue and vice versa

Question 3

For a unitary elastic demand curve:

Answer 3

a change in price does not affect total revenue