A FIRM INCREASED THE PRICE OF ITS PRODUCT BY 5.0 PER CENT AND OBSERVED THAT ITS REVENUE INCREASED BY 3.0 PER CENT. ENTHUSED BY THIS FACT, IT AGAIN RAISED PRICE BY ANOTHER 5.0 PER CENT. THIS TIME REVENUE FELL BY 8.0 PER CENT.HOW CAN ONE USE THE CONCEPT OF ELASTICITY TO EXPLAIN THIS BE EXPLAINED?

/in /by

A FIRM INCREASED THE PRICE OF ITS PRODUCT BY 5.0 PER CENT AND
OBSERVED THAT ITS REVENUE INCREASED BY 3.0 PER CENT. ENTHUSED BY THIS
FACT, IT AGAIN RAISED PRICE BY ANOTHER 5.0 PER CENT. THIS TIME REVENUE
FELL BY 8.0 PER CENT.HOW CAN ONE USE THE CONCEPT OF ELASTICITY TO
EXPLAIN THIS BE EXPLAINED?

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