Topic Videos
Price Elasticity and Total Revenue
- Level:
- AS, A-Level, IB
- Board:
- AQA, Edexcel, OCR, IB, Eduqas, WJEC
Last updated 16 Feb 2019
This short revision video explores the important link between the coefficient of price elasticity of demand and total revenue for a supplier
Key summary
Impact on total revenue for a good with an inelastic demand if the price rises
- If Ped <1, then a rise in price leads to an increase in total revenue
Impact on total revenue for a good with an elastic demand if the price rises
- If Ped > 1, then a rise in prices leads to a decrease in total revenue
Impact on total revenue for a good with unitary elastic demand if the price rises
- If demand has unitary elasticity, then a change in price leaves total revenue unchanged
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