Thus, it is a measure of how much money a company makes from selling its product. The core
objective of a firm is maximizing profit. One of the ways to maximize profit is increasing total revenue.
The firm can increase its total revenue by selling more items or by raising the price. Among others,
this depends on the nature of the price elasticity of demand. Moreover, the length of time is an
important factor in determining price elasticity of demand and supply. Course outcome( s) practiced and assessed in this Assignment:
GB540-1: Examine microeconomic tools for purposes of problem solving, analysis, and decisionmaking.
Directions
● Explain the relationship between the price elasticity of demand and total revenue. What are the
impacts of various forms of elasticities( elastic, inelastic, unit elastic, etc.) on business
decisions and strategies to maximize profit? You can explain your responses using empirical
examples, formulas and graphs.
● Is the price elasticity of demand or supply more elastic over a shorter or a longer period of
time? Why? Give examples.