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Consider that you are a manager of a company selling laptops--these days.
Suppose the price elasticity of demand is 1.7.
Is this price elastic or price inelastic demand?
What happens to total revenues (price X quantity) as you increase price with a price elasticity of demand of 1.7? Do revenues go up or down?
What happens to total revenues (price X quantity) as you decrease price with a price elasticity of demand of 1.7? Do revenues go up or down?
Why do we care about revenues? Do we want to focus on revenues or profits (profits = revenues - costs)? For what products will maximizing revenues be similar to maximizing profits?
How is this info helpful to a manager?
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