okntencesMcGrawHillAruna owns Pottery Plus, a small firm that produces terra cotta pots for sale in the Edmonton area. The graph below shows Aruna'sdemand curve.Price ($)40363228242016128404812 16 20 24 28 32 36 40Quantity per periodSearch< PrevH3 of 6SAMSUNGNext > 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 youranswer as an absolute number.AWhat 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 youranswer as an absolute numberWhat is the co-efficient for price elasticity of demand between those two prices? Round your price answer to two decimal places.O Search< PrevM3 of 6 86SAMSUNGNext >

Above demand function depicts a kink at price level 12 corresponding to quantity level 20 .

Answered: Aruna owns Pottery Plus, a small firm…

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. Price ($) 40 36 32 28 24 20 16 12

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

ok
nt
ences
Mc
Graw
Hill
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.
Price ($)
40
36
32
28
24
20
16
12
8
4
0
4
8
12 16 20 24 28 32 36 40
Quantity per period
Search
< Prev
H
3 of 6
SAMSUNG
Next >

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.
A
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.
O Search
< Prev
M
3 of 6 86
SAMSUNG
Next >

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