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# Econ elasticties ques watch

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1. 5000 subscriptions to a channel if price is set at £10
price elasticity -2
price reduction to £9
whats the effect on revenue?

answer is increase by 4000
i cant seem to get this answer?
2. (Original post by PrincessParadox)
5000 subscriptions to a channel if price is set at £10
price elasticity -2
price reduction to £9
whats the effect on revenue?

answer is increase by 4000
i cant seem to get this answer?
is that price elasticity of demand?
3. PED = ∆D/∆P

-2 = ∆D/-10
∆D = +20

So demand is now 1.2*5000, which is 6000

Revenue before: 5000*10 = 50 000
Revenue after: 6000*9 = 54 000

54000 - 50000 = 4000
4. ah yes thanks m1ikia
i was doing 20% less demand

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