ECO101H1 Lecture 6: Lecture6
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ECO101H1 Full Course Notes
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If raise: (1) customers who continue to buy your water would pay more(thus, increasing total revenues) (2) you would have fewer customers due to the law of downward-sloping demand(thus, reducing revenues) insight: We need more information about the demand curve in order to answer the question. A: yes, if demand is elastic no, if demand inelastic. Note:marketing experts devote great e ort to determing if the demand for their product in inelastic or elastic at the current price. Text narrowly de nition>>>>higher elastic quantity demanded is totally unresponsible to the price below: irrevalent. Ex: the demand by(a wealthy)individu al for kidney dialysis, when the individual will die without. At a price in excess of , what is demand?a:0. A:not relevant(since there is unlimted demand at ,this case is not relevant no one would sell a bill for less than ) 1)elasticity varies along a (downward sloping)liner demand curve.
