Price Elasticity of Demand and Total Revenue

at
Categories
Tags

 

In this assignment, you will deal with the relationship between price elasticity of demand and total revenue.
According to the law of demand, if price increases, quantity demanded of a good or service will decrease or vice versa. Price elasticity of demand tells us how much quantity demanded will decrease when price increases or how much quantity demanded will increase if price decreases.
On the other hand, according to the law of supply, if the price increases, quantity supplied of a good or service will increase. Similarly, if price decreases, quantity supplied will decrease. The degree of sensitivity (responsiveness) of production/supply to a change in price is measured by the concept of price elasticity of supply.
Total revenue is calculated as the quantity of a good or service sold multiplied by its market price. Thus, it is a measure of how much money a company makes from selling its product. The core objective of a firm is maximizing profit. One of the ways to maximize profit is increasing total revenue. The firm can increase its total revenue by selling more items or by raising the price. Among others, this depends on the nature of the price elasticity of demand. Moreover, the length of time is an important factor in determining price elasticity of demand and supply.
Course Outcome practiced and assessed in this assignment:
GB540-2: Examine microeconomic tools for purposes of problem solving, analysis, and decision making.
Directions: Answer –
• Explain the relationship between the price elasticity of demand and total revenue. What are the impacts of various forms of elasticities (elastic, inelastic, unit elastic, etc.) on business decisions and strategies to maximize profit? Explain your responses using empirical examples, formulas, and graphs for the various types of elasticities.
• Is the price elasticity of demand or supply more elastic over a shorter or a longer period of time? Why? Give examples.
• What are the impacts of government and market imperfections (failures) on the price elasticities of demand and supply?

 

 

 

Sample Solution

 

 

Vanity Fair

Vanity reasonable and vanity reasonable do exclude the full scope of Sakurai virtuoso, however it is the most unique presentation. As far as passionate newness, development flexibility, and objective happenstance, it is profitably recognized from replacements, however the last comprises of ceaseless occasions and individuals’ collection without the guideline of imaginative decision It gives the impression. Float to the story and join. This style has individual character aura and recognizable tattle indiscretion, yet the sentence has been iteratively changed, each and every stone appears to have obstructed it.

This July is the fifteenth commemoration of one of the most delegate news-casting ever: the front of 2003 of the Vanity Fair is “It is the blustery season youngster”. Vanity Fair took a nearby meeting with the most well known young people around then. Also, I included riddles of “most loved male” and “most loved wonderful kid” and pictures that cause them to feel old with no uncertainty. In the time of glorious sentimentality, this story has been played ordinarily, there is sufficient article “where are they now?” So, to celebrate the enormity of the “blustery youth”, we chose to have a go at something new: revamp it myself. Keep perusing and see Local at long last addressed troublesome inquiries.

In a meeting with the Vanity Fair, President Obama accentuated the significance of day by day work, not agonizing over little things. “You will find that I am wearing just dark or blue suit,” he revealed to Michael Lewis, creator of “vanity.” “I am going to settle on a choice and I would prefer not to choose what I will eat or what I will wear since I have such a large number of different choices.” According to a study that Mr. Obama stated, choices will bring down one individual It will be. Capacity to settle on further choices. “We have to focus on the vitality of dynamic,” Mr. Obama proceeded. “You have to standardize yourself, you can not spend the day when it is an insignificant interruption.”

In view of composing Nancy Joe for essayist Nancy Joe Sales Vanity Fair, her Vanity Fair article “The Suspects Wore Louboutins”, how would you consider Alexis Neiers? After Sales, Alexis was irate when perusing the conclusive outcome. At the point when she left Nancy Joe Sales, the TV arrangement broadcast a few passionate phone messages (watching the clasp) on her unscripted TV drama “Excellent Wild”. In a meeting with VICE.com, Alexis told Nancy Joe, “… the main explanation Nancy Joe is entirely related – I was on the TV @ * King conflict No, I am embarrassed about you, Nancy! You as of now endure you with the torment you have. They demand that we have everything. Everybody I need to be acclaimed. ”

 

 

This question has been answered.

Get Answer