given the demand function, Q=20-2p, find the price range for which a) demand is elastic b)...

given the demand function, Q=20-2p, find the price range for which
a) demand is elastic
b) demand is inelastic
c) demand is unit elastic
d) if the firm increases the price to £7, is the total revenue increasing or reducing?

Solutions

Expert Solution

The demand is elastic in the range from P=0 to P=5, and above P=5 the demand is inelastic. In the inelastic range the increase in price will result in increasing total revenues and in the elastic range a price fall will lead to increase in revenues.

Rahul Sunny answered 1 year ago

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