Given that tomatoes have a price elastic demand the total revenue of tomato firms will?

Question: Given that tomatoes have a price elastic demand the total revenue of tomato firms will?

Since tomatoes have a price elastic demand, a decrease in price will lead to a more than proportionate increase in quantity demanded. This means that total revenue will increase.

For example, if the price of tomatoes decreases by 10%, the quantity demanded might increase by 20%. This would result in a 10% increase in total revenue.

Note that this is only true for price changes within the elastic region of the demand curve. If the price is decreased below the elastic region, the quantity demanded will increase, but not by enough to offset the decrease in price, resulting in a decrease in total revenue.

Here is a table summarizing the relationship between price elasticity of demand and total revenue:

Price elasticity of demand	Effect of price decrease on total revenue
Elastic	Increase
Unit elastic	No change
Inelastic	Decrease

I hope this helps!

Disclaimer

All information provided on this site is generated by artificial intelligence. If you find any content objectionable or have concerns about the information provided, please feel free to comment or contact us directly.

Rjwala

Rjwala is your freely Ai Social Learning Platform. here our team solve your academic problems daily.