The quantity consumed of a good is relatively responsive to a change in the price of the good. A rise in price will reduce consumption considerably.
INELASTIC DEMAND: Demand is inelastic if the absolute value of the own price elasticity is less than 1.
The quantity consumed of a good is relatively unresponsive to a change in the price of the good when demand is elastic. Price increases will reduce consumption very little.
UNITARY ELASTIC DEMAND: Demand is unitary elastic if the absolute value of the OPE is equal to 1.
Advertising often provides consumers with information about the existence or quality of a product, which in turn induces more consumers to buy the product.
MC=Change in TC/Change in Q
MR=Change in TR/Change in Q
TR=P * Q
Breakdown of ATC (Average Total Cost Curve) and Maximization of Profit for a MONOPOLIST