When demand is price elastic, consumers are highly responsive to price changes. A decrease in price leads to a proportionally larger increase in quantity demanded, increasing total revenue.
When demand is price elastic, consumers are highly responsive to price changes. A decrease in price leads to a proportionally larger increase in quantity demanded, increasing total revenue.
A price ceiling set below equilibrium creates a shortage because the quantity demanded exceeds the quantity supplied at the artificially low price.
For a normal good, higher consumer income increases demand, shifting the demand curve to the right. Substitutes and complements affect demand differently.
A positive cross-price elasticity indicates that when the price of one good rises, the demand for the other good increases, suggesting they are substitutes.
