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Demand Elasticity and Total Revenue

A linear downward-sloping demand curve has a range of demand elasticities and an inverted U-shaped total revenue curve under single pricing.

Glossary:

  • elastic demand
    Demand is elastic when the percentage change in quantity demanded is larger than the percentage change in price. Total revenue would increase with price decreases and decrease with price increases.
    diagram

Topics:

Market Demand, What Price Means, Pricing Strategy

Keywords

demand elasticity, elastic demand, inelastic demand, total revenue