1.Previous
3.Next

shows price points at the points labeled A, B, and C. When a vendor increases a price beyond a price point (say to a price slightly above price point B), sales volume decreases by an amount more than proportional to the price increase. This decrease in quantity demanded more than offsets the additional revenue from the increased unit price. As a result, total revenue (price multiplied by quantity demanded) decreases when a firm raises its price beyond a price point. Technically, the price elasticity of demand

1.Previous
3.Next