Unit Elastic Demand Elasticity equals 1 Price 1.A22%$5 Increase In price. 4 Demand 80 100 Quantity 2..leads to a 22% decrease in quantity Harcourt, Inc. items and derived items copyright o 200l by harcourt, Inc
Harcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. Unit Elastic Demand - Elasticity equals 1 Quantity Price 4 1. A 22% $5 increase in price... Demand 80 100 2. ...leads to a 22% decrease in quantity
Elastic Demand Elasticity is greater than 1 Price 1.A22‰$5 Increase price. 4}……………………………… Demand 50 100 Quantity 2.leads to a 67% decrease in quantity Harcourt, Inc. items and derived items copyright o 200l by harcourt, Inc
Harcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. Elastic Demand - Elasticity is greater than 1 Quantity Price 4 $5 1. A 22% increase in price... Demand 50 100 2. ...leads to a 67% decrease in quantity
Perfectly Elastic Demand Elasticity equals infinity Price 1. At any price above $4, quantity demanded is zero Demand 2. At exactly $4, consumers will buy any quantity 3. At a price below $4 Quantity quantity demanded is infinite Harcourt, Inc. items and derived items copyright o 200l by harcourt, Inc
Harcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. Perfectly Elastic Demand - Elasticity equals infinity Quantity Price Demand $4 1. At any price above $4, quantity demanded is zero. 2. At exactly $4, consumers will buy any quantity. 3. At a price below $4, quantity demanded is infinite
Elasticity and Total Revenue Total revenue is the amount paid by buyers and received by sellers of a good. Computed as the price of the good times the quantity sold TREPX Q Harcourt, Inc. items and derived items copyright o 200l by harcourt, Inc
Harcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. Elasticity and Total Revenue Total revenue is the amount paid by buyers and received by sellers of a good. Computed as the price of the good times the quantity sold. TR = P x Q
Elasticity and Total Revenue Price PxQ=$400 (total revenue) Demand 100 Quantity Harcourt, Inc. items and derived items copyright o 200l by harcourt, Inc
Harcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. $4 Demand Quantity P 0 Price P x Q = $400 (total revenue) 100 Q Elasticity and Total Revenue