14 May Answer Questions
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3. Explain how a seller can determine whether the demand for his or her good is inelastic, elastic, or unit elastic between two prices.
Elastic is focused on how to make the most revenue and pricing is the most important thing for explaining inelastic, elastic, and unit elastic. In inelastic, the percentage change in the quantity demand of a good is less than while inelastic the percentage change in the quantity demanded is greater than when it comes to changes in prices. Lastly, the unit elastic is the percentage change in the quantity demanded of a good is the same when it comes to change in price. The seller would need information about the price before and after in order to figure it out. He/ she will need the formula to plug in for that price of a good but he/she needs to change the price first and also have to figure out the elasticity.
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