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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 using empirical examples.

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?

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Darryn D'Souza
Darryn D'SouzaLv10
28 Sep 2019

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Related questions

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 using empirical examples.

Explain why the demand for the good or service provided by a firm is elastic or inelastic. How does the elastic or inelastic demand influence pricing decisions by the firm to maximize profit? What are the impacts of elastic demand and inelastic demand on total revenue?

Provide examples of how the availability of close substitutes affects the price elasticity of demand for a good or service.

Give specific examples of necessities or luxuries, and explain how they affect price elasticity of goods or services.

You just opened a flower shop and are trying to understand pricing issues. You were told that elasticities are very important in determining prices and what products to supply, so you decide to investigate this concept. You call your friend, an economics professor, and ask, "What is the price elasticity of demand? What determines it? What is elastic and inelastic demand?" To really understand it, compute the following price elasticities of demand: The price of a laptop increases by 20% and there is a 40% drop in the quantity demanded. The price of a pack of cigarettes increases by 10% and there is a 5% drop in the quantity demanded. Of the above examples, which is more elastic, and which is the least elastic? Why? Answer the following questions: Why is elasticity an important concept for a business? Bridge tolls Beachfront properties Gourmet coffee Gasoline Cell phones Now that you are an expert on elasticities, what do you think would be the best time of year to raise prices of flowers, and why? What do you think the elasticities are in the flower business?

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