MBA 701, Assignmen t3 Due October 2, 2021 Student ID number 21001870

MBA 701, Assignmen 8 Due October 2, 2021 Student ID number c21001870 Fill in 1. A deli raises the price of its Philly Cheesesteak Sandwich from $8.50 to $9.50. The quantity sold falls from 150/ day to 130/day. Calculate the arc price elasticity of demand. 2. Given your answer to (1), and given that the marginal cost of is $4, should the restaurant raise or lower its price of its Philly Cheesesteak Sandwich (relative to the $9.50) to increase its profit? Assume that the price elasticity of demand is constant, at your answer to (1). 3. Sherlock Homes does house inspections for $250. Market research indicates that if the price was increased to $380 quantity demanded would fall to zero. Assuming that demand can be modeled with a linear demand curve, estimate the price elasticity of demand at $250.