Index
Elasticity - 1
Elasticity - 2
Elasticity - 3
The Total Outlays Method - 4
Total Outlays - 5
Total Outlays - 6
Total Outlays - 7
Revenue Loss - Revenue Gain - 8
Revenue Loss - Revenue Gain - 9
Inelastic Demand - 10
Inelastic Demand - 11
Elastic Demand - 12
Summary and Solutions - 13
Perfectly Elastic Demand - 14
Perfectly Inelastic Demand - 15
Arc Elasticity of Demand - 16
Calculating Elasticity of Demand - 17
Calculating Elasticity of Demand - 18
Calculating Elasticity of Demand - 19
Factors Effecting Elasticity of Demand- 20
Normal and Inferior Goods - 21
Factors Effecting Elasticity of Supply - 22
Factors Effecting Elasticity of Supply - 23
Factors Effecting Elasticity of Supply - 24
Inelastic Supply - 25
Perfectly Inelastic Supply - 26
Elastic Supply - 27
Factors Effecting Elasticity of Supply - 28
Factors Effecting Elasticity of Supply - 29
Factors Effecting Elasticity of Supply - 30
Cross Elasticity of Demand - 31
Income Elasticity of Demand - 32
Income Inelastic Goods - 33
Income Elasticity - 34
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Elasticity - 9

You, however, are more in touch with teenage trends and fashion than I am.

You reply ''Brand ''X'' is really popular at the moment. I believe we can increase the price to $1.40 per can. We will lose very few sales''.

You show me your analysis (shown above) of the market for brand ''X''. An increase in price to $1.40 per can will only cause a loss of 10 cans in sales per day. The revenue gain from the increase in price ($0.40 x 190 cans = $76) will more than compensate for the revenue loss caused the decrease in quantity sold ($1.00 x 10 = $10)

You have correctly noticed that Brand ''X'' is price inelastic, and that an increase in price will generate more net revenue.