If you and your business partner are trying to increase your total revenue, and you want a lower price than she does, it could be because you think the relevant demand curve is more elastic than your partner does.

Question

Quizplus · Accepted Answer

A more elastic demand curve means that price changes have a greater impact on the quantity demanded. Therefore, if you believe the demand curve is more elastic, you may be willing to lower the price to attract more customers and ultimately increase total revenue.

If You and Your Business Partner Are Trying to Increase