Lecture 6

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Department
Economics for Management Studies
Course
MGEA01H3
Professor
Kieran Furlong
Semester
Fall

Description
Elatic- the percentage change in quantity is greater then the percentage change in price. Maple Leaf tickets are inelastic. Point elasticity is only accurate for one small point change. He does not care whether the answer is positive or negative. Elastic- price went down, total revenue went up. TR=P*Q TC=Fixed cost+ cost of every unit (Variable Cost) Inelastic-tr went up No monopoly every produces in the inelastic portion of a demand function. They are not subject to the market price increases because they are price setters. Every linear demand function- Tr is in the middle Marginal Revenue is zero at the mid point.
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