Answer the following questions based on the accompanying diagram.a. How much would the firm??s revenue change if
Question:
Answer the following questions based on the accompanying diagram.a. How much would the firm??s revenue change if it lowered price from $12 to $10? Is demand elastic or inelastic in this range?b. How much would the firm??s revenue change if it lowered price from $4 to $2? Is demand elastic or inelastic in this range?c. What price maximizes the firm??s total revenues? What is the elasticity of demand at this point on the demandcurve?
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a When P 12 R 121 12 When P 10 R 102 20 Thus the price decrease results in an 8 inc...View the full answer
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Related Book For 
Managerial Economics and Business Strategy
ISBN: 978-0071267441
7th Edition
Authors: Michael R. baye
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