Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Jun 15, 2022

Given the price elasticities and price changes for the following products AE in the table below, show how much the quantity will change (indicating an

Given the price elasticities and price changes for the following products A–E in the table below, show how much the quantity will change (indicating an increase or decrease) and what effect this will have on total revenue (indicating an increase or decrease). Round your answers to 1 decimal place.

Product	Price elasticity	% ∆ Price	%∆ Quantity	∆ Total revenue
A	0.6	increase by 9%	(Click to select) decrease increase by %	(Click to select) increase decrease constant
B	1.3	decrease by 6%	(Click to select) increase decrease by %	(Click to select) increase decrease constant
C	0.3	decrease by 12%	(Click to select) decrease increase by %	(Click to select) increase decrease constant
D	1.0	increase by 4%	(Click to select) decrease increase by %	(Click to select) increase decrease constant
E	3.3	increase by 5%	(Click to select) increase decrease by %	(Click to select) increase decrease constant

Step by Step Solution

★★★★★

3.45 Rating (155 Votes )

There are 3 Steps involved in it

Step: 1

Price elasticity of demand change in quantity demanded change in price Note Price elasticty of demand is repsented in negative sign because there is an inverse relationship between quantity demanded and price So if price elasticity is given as 06 Then take it as 06 Demand is elastic if absolute value of price elasticity of demand is less than 1 Demand is inelastis if absolute value of price elasticity of demand is more than 1 Demand is unitary elastic if absolute value of price elasticity of demand is equal to 1 Relationship between pirce and total revenue If demand is elastic then there is an negative realtionship between price and total revenue If demand is inelastic then there is a ... blur-text-image

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_2

Step: 3

blur-text-image_3

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

Microeconomics

Microeconomics

Authors: Christopher T.S. Ragan, Richard G Lipsey

14th canadian Edition

321866347, 978-0321866349

More Books

Students explore these related Accounting questions

Question

For 7a-c, use u1= 4. Round your answers to the nearest thousandth. a. For a geometric series with r = 0.7, find S10 and S40. b. For r = 1.3, find S10 and S40. c. For r = 1, find S10 and S40. d. Graph...

Answered: 3 weeks ago

Question

The data in the table below show a decrease in the average number of miles per passenger car from 2005 to 2008. Year, x Average Number of Miles per passenger Car 2005, 0 ................. 12,510...

Answered: 3 weeks ago

Question

Discuss all reasons that could explain an increase or decrease in gross profit margin.

Answered: 3 weeks ago

Question

Molly earns a gross yearly salary of $132,676. She has no dependent children and made the following tax deductible purchases: Charitable contributions: $5,401 Student loan interest: $1,429 When she...

Answered: 3 weeks ago

Question

After evaluating the risk of the investment described in Exercise, B2B Co. concludes that it must earn at least an 8% return on this investment. Compute the net present value of this investment....

Answered: 3 weeks ago

Question

Water in a horizontal channel accelerates smoothly over a bump and then undergoes a hydraulic jump, as in Fig. P10.93. If y1 = 1 m and y3 = 40 cm, estimate (a) V1; (b) V3; (c) Y4; and (d) The bump...

Answered: 3 weeks ago

Question

How do you account for the results? What are the competing explanations, and how did the authors deal with them? What competing explanations can you think of other than those the author discussed?

Answered: 3 weeks ago

Question

Capstan Autos operated an East Coast dealership for a major Japanese car manufacturer. Capstan's owner, Sidney Capstan, attributed much of the business's success to its no-frills policy of...

Answered: 3 weeks ago

Question

Bando Corp. sells a single part for a price of $37 per unit. The variable costs of the part are $13 per unit and monthly fixed costs are $120,000. Required: a. What is the break-even level of monthly...

Answered: 3 weeks ago

Question

At your daughter's 6th birthday party she tells you that she wants to go to Princeton. It will cost you $30,000 per year for her to attend this four year program. You start putting money into an...

Answered: 3 weeks ago

Question

Carrier Sales Sales discounts $ 168,000 2,000 Sales returns and allowances 20,000 Cost of goods sold 96,652 Lennox $ 910,000 21,000 6,000 542,162 Trane York $ 56,000 $ 275,000 600 5,200 5,700 1,300...

Answered: 3 weeks ago

Question

Find the average value and estimate the uncertainty of these three measurements of length: 3.4 cm, 3.0 cm, and 3.5 cm. The average value is ____ and the uncertainty is ____. Question 13 options: A)...

Answered: 3 weeks ago

Question

A shipment of cereal boxes is delivered to a supermarket in Florida. The manager is told that the weights of the cereal boxes are normally distributed, with a mean of 165g and a standard deviation of...

Answered: 3 weeks ago

Question

A 4 kg block is sliding at a constant velocity of 1.5 m/s on a table, due to the pull of a hanging 0.5 kg mass as shown to the right. What is the consistent force of friction (Ff) acting between the...

Answered: 3 weeks ago

Question

. A manufacturer plans to introduce a new type of shirt based on the following information. The selling price is $35.00; variable cost per unit is $15.00; fixed costs are $8200.00; and capacity per...

Answered: 3 weeks ago

Question

45. Smelly Perfume Company manufactures and distributes several different products. The company currently uses a plantwide allocation method for allocating overhead at a rate of $7 per direct labor...

Answered: 3 weeks ago

Question

Examine the image below which shows a validation error in cells A6 and A10 of a spreadsheet. 4 5 6 7 8 9 10 11 12 13 14 A CustomerID C043 C0123 C032 C027 C034 C35 C036 C003 C009 C010 -1 B Customer...

Answered: 3 weeks ago

Question

Chicago Company sold merchandise to a customer for $1,500 cash in a state with a 6% sales tax rate. The total amount of cash collected from the customer was $558. $600. $642. $636. Nevada Company...

Answered: 3 weeks ago

Question

This question is related to the use of output quotas in the milk market in the previous question. Suppose the government used a quota system instead of direct price supports to assist milk producers....

Answered: 3 weeks ago

Question

Fill in the blanks to make the following statements correct. a. A tariff imposed on the import of leather shoes will cause an ________ in the domestic price. Total quantity of leather shoes sold in...

Answered: 3 weeks ago

Question

The table below provides price, revenue, and cost information for a monopolistically competitive firm selling drive-through car washes in a large city. a. Complete the table. b. Plot the demand,...

Answered: 3 weeks ago

Question

You are considering buying one of two types of health insurance. You guess that in the next year there is a 1 percent chance of serious illness that will cost you $67,500 in health care; a 9 percent...

Answered: 3 weeks ago

Question

You run a business and are considering offering a new service. If you offer the new service, you expect it to generate $60,000 in profits each year for your business over the next two years. In order...

Answered: 3 weeks ago

Question

Suppose the economy is suffering and many people are afraid they will be laid off from their jobs. Workers would like to protect against this risk with insurance. Identify and explain two problems...

Answered: 3 weeks ago

Previous Question Next Question