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11 Dec 2019
If demand is price inelastic, then:
1. Firms can earn more revenue by increasing their price if demand elasticity remains less than 1.
2. The demand curve is very flat
3. Firms in this market have a large amount of market power
4. Buyers respond substantially to a change in price, but the response is very slow
If demand is price inelastic, then:
1. Firms can earn more revenue by increasing their price if demand elasticity remains less than 1.
2. The demand curve is very flat
3. Firms in this market have a large amount of market power
4. Buyers respond substantially to a change in price, but the response is very slow
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Sonal BahlLv10
3 Oct 2020