00:01
Hello students, we are given a question here for each absolute values of price elasticity of demand indicate whether the demand is elastic, inelastic, perfectly elastic or perfectly inelastic or unit elastic.
00:14
We need to determine what would happen to the total revenue if a firm raised its price in each elasticity range identified.
00:24
So here we will start with first part when price elasticity of demand, it is given as, 2 .5 okay so we are supposed to know that it is elastic it is elastic okay students because it is greater than one and here we are supposed to know that if the firm raised price if a firm firm raised price okay students then total revenue total revenue will decrease okay, students, now second part is ed is equal to 1 .0.
01:13
So here as we are given that the price elasticity of demand is 1, it means it is unitary elastic.
01:21
It is unitary elastic.
01:27
Okay, students, so basically we can say that if a firm raised price, then $2 .2 .000.
01:40
Total revenue will not change.
01:43
Then total revenue, okay, students, will not change.
01:52
Now, third part is like, c is, e .d is equal to infinite...