Asked by NadineEconomics 📈

How do you show revenue gain and revenue loss on both an inelastic and elastic demand graph ?

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David Mageller

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If I've understood your question correctly, you'd first need to understand how revenue could change: When demand is inelastic – a rise in price leads to a rise in total revenue. When demand is elastic – a fall in price leads to a rise in total revenue. In terms of actually showing it on the demand curve, I need to know what kind of curve you have. Do you just have a demand curve, or do you have the marginal cost and marginal revenue curve as well? Generally, if all you have is the demand curve, the entire area under the curve will show you your revenue. If you have a follow up question on the back of this, just ask again and I'll take a look!

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