ECONOMICS

Article Review

Article Review

In case of perfectly elastic supply

In case of perfectly elastic supply, if there is reduction in the price of The Times, there won't be any significant change in the revenue. The change in the sales level won't be that significant as supplier isn't going to be benefitted by this apparent change in the price. There will be an increase in the equilibrium quantity but the sales will be offset by the apparent decline in the price. Even thought average daily sales, have increased, the total revenue will take a beating.

As far as the sales of the rival ...