As the manager of a business and thinking about changing the prices, of what is charged...

As the manager of a business and thinking about changing the prices, of what is charged for your goods/services to increase your revenue and profits. Would you increase or decrease the prices one charge to increase the revenue. What are examples of specific goods or services?

What is the use of the concept of price elasticity of demand to answer this question fully?

Expert Solution

As a manager I would first check if the demand for the goods that we are selling is elastic or inelastic, if the demand is elastic then it will not be advised to change the price, if the demand in the market is inelastic then increasing the price of the goods will increase the price.

for example, if we are seling medicine or gasoline, or other goods which have inelastic demand then increasing the price will increase the revenue.

Rahul Sunny answered 2 years ago

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