Question

How AR, MR and Elasticity of demand are related?​

Answer 1

The relationship between AR, MR and elasticity of demand is very useful at any level of output. This relationship is very useful in the price-determination under different market conditions. ... It meanselasticity of demand at any point on thedemand curve is the same thing as theelasticity on the demand curve.

Answer 2

Answer:

equation (1) was estimated by size-of- deposits category, 27 the smallest banks turned out to be the only group where demand for credit card loans was elastic with respect to the interest rates. See Table 6 for the results. 28 If an average bank from the first category (deposits below $500 million) raised its APR by 1 percentage point, its outstanding credit card loans would drop by 14.4 percent (a $50 million decrease). ...