Be able to compute the elasticity of a commodity at any price given the demand function. Use the elasticity function to find the maximum revenue and corresponding price/quantity of the commodity.
How do price, revenue, and elasticity relate to each other?
If you change price, how does it affect demand, revenue, and elasticity?
What is the formula for maximum revenue?
Why does E = 1 at the maximum revenue point?
What does it mean for a product to be inelastic?
Staff Review
Currently 4.0/5 Stars.
This lesson continues the concepts from the previous lesson. The relationships between price, revenue, and elasticity are explained in this lesson. You will learn how to maximize revenue for a product.