Author Question: Is there any set of relationships between price elasticity of supply and total revenue similar to ... (Read 67 times)

melly21297 · **on:** Jun 29, 2018

Is there any set of relationships between price elasticity of supply and total revenue similar to the relationships between price elasticity of demand and total revenue?

What will be an ideal response?

Question 2

Fast Copy is a perfectly competitive firm. The figure above shows Fast Copy's cost curves. The current market price is 2 cents per page. With no change in demand and technology, in the long run, the price will

A) remain unchanged.
B) rise to 5 cents per page.
C) rise to 4 cents per page.
D) fall to 1 cent per page.

carlsona147 · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

No. When the price increases along an upward sloping supply curve, total revenue will increase whether supply is elastic or inelastic. When price decreases along an upward sloping supply curve, total revenue will decrease whether supply is elastic or inelastic.

Answer to Question 2

A