Price elasticity of demand

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Price Elasticity of Demand

Elasticity refers to the change of one variable because of a change in another.

Price elasticity of Demand refers to the percentage change in demand of a good based on its percentage change in price. Changes in price and demand will affect total revenue for the firm

Explain what happens to total revenue when the price of a relatively elastic good is increased and decreased. 100 words

What happens to the total revenue when the price of a relatively inelastic good is increased and decreased and explain why it behaves this way. 100 words

Finally, explain why it is beneficial for retailers to understand this concept and why they should know the relative elasticity or inelasticity of the products they sell. Give an example. 100 words

Please provide references in APA format

Reference no: EM131386463

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