Illustrate what do you think would happen to sale and price

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Q1: If the price of DVD players declines by 20% and the total revenue from the sale of DVD players rises, what can you say about the price elasticity of demand for DVD players? Will the price reduction necessarily lead to an increase in profits for DVD player manufactures?"

Q2: I think the question only regards DVD players, not DVDs. We shouldn't need to consider DVDs themselves at all in answering the question. Though it does lead to an interesting next question. What do you think would happen to sale and price of DVDs after this?

 

Reference no: EM1364075

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