Does revenue increase or decrease if the demand curve is inelastic at the initial price? How...

 

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Does revenue increase or decrease if the demand curve is inelastic at the initial price? How does it change if the demand curve is elastic? Consider the extreme case where the demand curve is perfectly inelastic and then generalize to the inelastic case. Use the rectangle drawing tool to shade in the increase in revenue (C), if any, and the decrease in revenue (B), if any, from increasing price from p₁ to P₂. Properly label the shaded area(s). Carefully follow the instructions above, and only draw the required object. Price, p. $ per unit X D Q₁ Q₂ Quantity, Q, Units per year. do E Does revenue increase or decrease if the demand curve is inelastic at the initial price? How does it change if the demand curve is elastic? Consider the extreme case where the demand curve is perfectly inelastic and then generalize to the inelastic case. Use the rectangle drawing tool to shade in the increase in revenue (C), if any, and the decrease in revenue (B), if any, from increasing price from p₁ to P₂. Properly label the shaded area(s). Carefully follow the instructions above, and only draw the required object. Price, p. $ per unit X D Q₁ Q₂ Quantity, Q, Units per year. do E

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Im unable to interact with or modify images so I cant use the rectangle drawing tool to shade areas ... View the full answer