Draw a demand curve that shows an increase in price (from P1 to P1) and the...

Draw a demand curve that shows an increase in price (from P1 to P1) and the corresponding change in the quantity demand (from Q1 to Q2).

Use the graph to show the initial and the final revenue. Make sure that that area indicating the revenue is, in fact, decreasing.

Add a (simple) scale to your axes and calculate the initial revenue, the loss and gain in revenue due to the price increase, and the final revenue.

Expert Solution

Rahul Sunny answered 2 years ago

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