Zia wants to increase total revenue at his restaurant. The price elasticity of demand for several dishes that he serves are given in the table below.
Price elasticity of demand of Malaysian dishes
Dish Price elasticity of demand
Nasi lemak 0.7
Satay 2
Rendang 1
Ulam 1.4
Pulut 100
What dish should Zia increase the price of if she wants to increase total revenue?
PED for Nasi lemak is less than 1 which means its price inelastic. If Zia raises the price of this dish, qty dd will decrease by a smaller amount than she increases the price, as a result, its total revenue increases.
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