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Elastic Demand - Prices and Producer Revenue

Level:
A-Level, IB Diploma
Board:
AQA, Edexcel, Eduqas, IB, OCR, WJEC

Last updated 2 Jun 2017

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When the coefficient of price elasticity of demand is greater than one, then demand is said to be price elastic. One of the implications of this is that cutting prices can lead to an increase in total revenue because consumers are highly responsive to a price reduction. This short revision video takes students through a simple numerical example and a diagram to show the effects.

Elastic Demand - Prices and Producer Revenue
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