How does the concept of price elasticity relate to pricing and revenue? How can you determine the elasticity of a given category?
It can be mentioned that the price elasticity of demand is linked with that of pricing and revenue where is the price elasticity is greater than 1 which means the demand is elastic in nature and when the demand is elastic in nature in order to increase the revenue you have to decrease the price. Similarly if the demand is inelastic in nature, then it is important to increase the price in order to to increase the revenue on the whole. The determination of elasticity is quite simple based on the necessities where is the good is a necessary good then it would be inelastic in nature and when the good is elastic it means that it is a luxury good
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