Chapter5.+Elasticity__



Questions:

What happens to the total revenue in a relatively price elasticity of demand?

A) Total revenue decrease if price goes up and total revenue increase if price goes down.

What happens to the total revenue in a relatively price inelasticity of demand?

A) Total revenue increase if price goes up and total revenue decrease if price goes down.

Summary:

In this chapter, we learn about elasticity. Elasticity is how much people respond to a price change. If the quantity changes a lot by a tiny or many we call this elastic, because the consumers responded to the price change. If the quantity did not change by a change in the price, this is inelastic. There are things called //perfectly// elastic and //perfectly// inelastic this is when there is absolutely no change in the quantity by the changes made in the price.