Revenue and Elasticity

Revenue is equal to price times quantity and is represented by the shaded rectangles. Elasticity measures the responsiveness of the quantity demanded to a change in price. The effect of a price change on revenue depends on the elasticity of demand, as can be seen through varying the slope of the demand curve. Consider an initial price and quantity of 1 and 1 for a revenue, shaded in light blue, of 1. Now vary the price to see a new revenue shaded in yellow: mouse over the yellow to see the amount.

 
Powered by Wolfram Mathematica
Give us your feedback
Give us your feedback

Source page:




 often  occasionally  never

Note: Please do not include anything you consider confidential or proprietary. Your message and contact information may be shared with the author of any specific Demonstration for which you give feedback, but will not otherwise be published or distributed.
Privacy Policy »

Note: To run this Demonstration you need the free
Mathematica Player
or Mathematica 7+
Download or upgrade to Mathematica Player 7
I already have Mathematica Player or Mathematica 7+