Question on: SS2 Economics - Concept of Elasticity And Its Application
Why is the price elasticity of demand an important concept for firms?
View related lesson
Ask EduPadi AI for a detailed answer
The price elasticity of demand is important for firms because it helps them make pricing decisions. If the elasticity of demand for a product is high, a small increase in price will lead to a large decrease in demand. Therefore, firms may choose to keep prices low in order to increase demand and maximize profits.
Add your answer
Please share this, thanks!
No responses