If the demand for a product is inelastic, what will happen to total revenue if price is increased?
Below is my response but I need more words.

The total revenue will increase. When demand is inelastic, a given percentage increase in price corresponds to a smaller percentage decrease in quantity demanded. Thus total revenue, which is equal to price times quantity, must increase. The percentage change in the quantity demanded is less than the percentage change in price, then demand is inelastic.

For example; If the demand for insulin is inelastic, an increase in insulin prices leads to more total revenue for insulin makers

Solution Preview

The answer is, of course, an increase in total revenue.

Price elasticity of demand measures the sensitivity of demand after a price adjustment. The price elasticity of demand can be computed by getting the ratio between the percentage change in demand by the percentage change in price.

The standard formula is stated as:

Price elasticity of demand= Percentage change in quantity demanded / Percentage change in price

If the coefficient of the price elasticity of demand is within 0 and 1, the demand is inelastic.

A basic rule in elasticity concepts is that when ...

Solution Summary

The solution shows what will happen to the total revenue if the demand for a product is inelastic. An example is shown to illustrate this economic phenomena.
The sample computation established that if the quantity demanded in inelastic, an increase in the price will result to increase in revenue.

How would the following changes in price affect totalrevenue? That is, would totalrevenue increase, decrease, or remain unchanged?
a. Price falls anddemand is inelastic.
b. Price rises anddemand is elastic.
c. Price rises and supply is elastic.
d. Price rises and supply is inelastic.
e. Price rises anddemand is inela

Using graph(s) compare the impact on price, quantity andtotalrevenue when:
A) an elastic demand curve increases along a perfectly inelastic supply curve
B) an inelasticdemand curve increases along a perfectly inelastic supply curve
NOTE: Assume the increase in demand in both cases are of the same size.
This is just

Prepare an analysis by answering the questions below. Be sure to cite your references using APA format.
Demand Schedule for Barbeque Dinners
Price Quantity Demanded TotalRevenue Elasticity Coefficient Elastic or Inelastic
$4 100
__________ XXXX XXXX
6 80
__________ __________ __________

Elasticity andRevenue
Suppose that q = 500 - 2p units of a certain commodity are demanded when p dollars per unit are charged, for
0<=p<=250.
a) Determine where the demand is elastic, inelastic, and of unit elasticity with respect to price.
b) Use the results of part (a) to determine the intervals of increase and

1. Assume that, for a particular demand curve, when price rises from $50 to $60, totalrevenue falls from $8,750 to $7800.
a. Based on this information, what is the quantity demanded at each price.
b. Without calculating the coefficient of elasticity, is demand over this range elastic or inelastic?

1. Assume Amanda Herman finds that her total spending on compact dics remaing the same after the price of compact fall, other things equal. Which of the followin is true about Amanda's demand for compact dics with the price change. (a) It is perfectly price inelastic (b) unit price elastic (c) it is perfectly price elastic (d

1. Define and explain the differences among inelastic, elastic, and unitary price elasticity.
2. What questions would you ask regarding each?
3. What recommendations would you have?