GB 540 PU Price Elasticity of Demand and The Total Revenue Function Essay


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GB540 Economics for Global Decision Makers
Unit 3 Assignment
Price Elasticity of Demand and Total Revenue
In this assignment, you will deal with the relationship between price elasticity of demand and total reve
According to the law of demand, if price increases, quantity demanded of a good or service will decrea
demand tells us how much quantity demanded will decrease when price increases or how much quan
On the other hand, according to the law of supply, if the price increases, quantity supplied of a good o
decreases, quantity supplied will decrease. The degree of sensitivity (responsiveness) of production/s
by the concept of price elasticity of supply.
Total revenue is calculated as the quantity of a good or service sold multiplied by its market price. Thu
a company makes from selling its product. The core objective of a firm is maximizing profit. One of the
total revenue. The firm can increase its total revenue by selling more items or by raising the price. Am
of the price elasticity of demand. Moreover, the length of time is an important factor in determining pric
Course Outcome practiced and assessed in this assignment:
GB540-2: Examine microeconomic tools for purposes of problem solving, analysis, and decisionmakin
Explain the relationship between the price elasticity of demand and total revenue. What are the im
(elastic, inelastic, unit elastic, etc.) on business decisions and strategies to maximize profit? Expla
examples, formulas, and graphs.
Is the price elasticity of demand or supply more elastic over a shorter or a longer period of time? W
What are the impacts of government and market imperfections (failures) on the price elasticities o
Your assignment should have a cover sheet with the following information: Title of the paper, Your
Number, and Date
It must be a minimum of five pages long (excluding title page, references, etc.)
Be sure to include the criteria located in the rubric below within your paper.
e su e to c ude t e c te a ocated t e ub c be o
you pape
It must be APA formatted with citations to your sources and your last page should list all reference
format, visit the various writing resources, accessed under the Academic Tools area in the left nav
You must use a variety of two objective, high quality, and current sources. Peer reviewed articles,
textbooks, and library resources found in the Library are examples of high quality resources.
Note that Wikipedia, Investopedia, etc. are not considered as reliable resources for this research.
Directions for Submitting
Submit your Assignment to the Unit 3 Assignment Dropbox by the end of Unit 3.
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Explanation & Answer:
5 pages

Price elasticity of demand

rise in quantity percentages

The demand curve slope

price changes will not affect the total income

The Total Revenue Function

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