Question
The price elasticity of demand for cigarettes in the US has increased from 0.3 in 2009, to 0.7 today. If it continues in this trend,
The price elasticity of demand for cigarettes in the US has increased from 0.3 in 2009, to 0.7 today. If it continues in this trend, at some near future point, it will exceed 1.0. What will happen to the revenues (P * Q) if they raise prices then? Do total revenues always decline when prices rise, or only for price-elastic (PED > 1) products?
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Managerial Economics A Problem Solving Approach
Authors: Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
4th edition
1305259335, 978-1305259331
