Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Aruna owns Pottery Plus, a small firm that produces terra cotta pots for sale In the Edmonton area. The graph below shows Aruna's demand curve.

image text in transcribed
Aruna owns Pottery Plus, a small firm that produces terra cotta pots for sale In the Edmonton area. The graph below shows Aruna's demand curve. O Price ($) 40 36 32 28 24 20 15 12 4 8 12 16 20 24 28 32 36 40 Quantity per period a. If the firm wishes to maximize Its total revenue, at what price should it sell its pots? [ What Is its total revenue? $ [ b. Suppose that the firm were to Increase its price by $4 from the price In (a). What will be the change In Its total revenue? Give your answer as an absolute number. [ What Is the co-efficient for the price elasticity of demand between those two prices? Round your price answer to two decimal places. c. Suppose that the firm were to decrease its price by $4 from the price in (a). What will be the change In its total revenue? Give your answer as an absolute number. [ What is the co-efficient for price elasticity of demand between those two prices? Round your price answer to two decimal places

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Reimagining Capitalism In A World On Fire

Authors: Rebecca Henderson

1st Edition

1541730151, 9781541730151

More Books

Students also viewed these Economics questions

Question

What is a project life cycle, and how is it used?

Answered: 1 week ago

Question

List six habits that can help you become a more positive thinker.

Answered: 1 week ago