Explore BrainMass

Explore BrainMass

    Price elasticity of demand and total revenue

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    How does a business determine whether to increase or decrease the price of the product it sells in order to increase revenue? Explain how the pricing decisions are made based on the type of elasticity.

    © BrainMass Inc. brainmass.com October 10, 2019, 1:47 am ad1c9bdddf

    Solution Preview

    A business man can decide about price changes by finding price elasticity of demand at current level of prices.

    Total revenue and elasticity are strongly related. In case of inelastic demand, ...

    Solution Summary

    Solution describes how the concept of price elasticity of demand can be used in making decisions about price changes.