contestada

Assume the manager is located at point B in the diagram above, and he is charging a price of P0. What does the demand for the firm's goods look like if the management anticipates that rivals would not match price reductions but will match price rises instead of price decreases?

Assume the manager is located at point B in the diagram above and he is charging a price of P0 What does the demand for the firms goods look like if the managem class=

Respuesta :

Parrain

The demand for the firm's goods based on the diagram given and the current price is elastic.

Why is the price elastic?

Demand is said to be elastic when quantity demanded decreases when prices increase, and vice versa.

Looking at the graph, if there is a price increase by management, the demand will decrease as shown by the space on the blue line above quantity B.

If prices reduce however, the demand increases as shown by curve D₂.

In conclusion, the demand is elastic.

Find out more on elastic demand at https://brainly.com/question/7966430.

Otras preguntas