I'm trying to figure out the solution to this if the price elasticity of demand is 1.12
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Question:
I'm trying to figure out the solution to this if the price elasticity of demand is 1.12
given this price elasticity of demand coeffiecient what would happen to the quanity demanded in % terms if the price decreased by 10 % in this range.
what would be the effect of the price increse above on total revenue. when there is a price increase it will increase revenue but it will lower sales which will reduce total revenue(the quanity effect)
im not sure how to approach tax revenue..
the original numbers were.... p1 $4.50 p2 $5.00 q1 45 q2 45
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