Suppose that at a price of $55, 100 units were sold while at a price of $33, 153 units were sold. Without calculating the price elasticity value, can you determine whether demand is elastic, unit elastic, or inelastic? Explain your answer
What will be an ideal response?
The first total revenue is ($55 ) × (100 ) = $5,500 while the second total revenue is ($33 ) × (153 ) = $5,049. Because total revenue decreased when price fell, demand must be inelastic.
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