Joe initially charged $180 for a electronic product and averaged 20 clients per week. When he raised his price to $220, the number of sales decreased to 15 per week. What is the price elasticity of demand for his product? Majed initially charged $50/hr. for helping with practice questions and averaged 35 clients per week. When he raised his price to $75, the number of sessions increased to 40 per week. What is the price elasticity of demand for his services?

Joe initially charged $180 for a electronic product and averaged 20 clients per week. When he raised his price to $220, the number of sales decreased to 15 per week. What is the price elasticity of demand for his product? Majed initially charged $50/hr. for helping with practice questions and averaged 35 clients per week. When he raised his price to $75, the number of sessions increased to 40 per week. What is the price elasticity of demand for his services?

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter6: Simple Pricing

Section: Chapter Questions

Problem 6.1IP

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Seven years ago, you started a cross-town delivery service. You have two types of deliveryservices. You have a small parcel service for anything that is flat and measures less than 11x17. You have a package service using a 100 lb capacity bike trailer for anything weighting up to 10lbs. Initially, you charged the same price for each service, but since the beginning of the Covid19 pandemic you have seen an increased in the demand for your package service. The demand for the package services seems to be more inelastic than the demand for parcels. You are now wondering if you should charge different prices for the parcel and package service or should you segment the market and charge two different prices? Complete the tables below and determine the best price strategy: price the services differently in each segment; or continue the one price policy? Combined Parcels & PackagesPrice Parcels and Packages TR MR TC MC MR-MC…
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Seven years ago, you started a cross-town delivery service. You have two types of deliveryservices. You have a small parcel service for anything that is flat and measures less than 11x17. You have a package service using a 100 lb capacity bike trailer for anything weighting up to 10lbs. Initially, you charged the same price for each service, but since the beginning of the Covid19 pandemic you have seen an increased in the demand for your package service. The demand for the package services seems to be more inelastic than the demand for parcels. You are now wondering if you should charge different prices for the parcel and package service or should you segment the market and charge two different prices? Complete the tables below and determine the best price strategy: price the services differently in each segment; or continue the one price policy? The Packages Market Price Packages TR MR TC MC…
Seven years ago, you started a cross-town delivery service. You have two types of deliveryservices. You have a small parcel service for anything that is flat and measures less than 11x17. You have a package service using a 100 lb capacity bike trailer for anything weighting up to 10lbs. Initially, you charged the same price for each service, but since the beginning of the Covid19 pandemic you have seen an increased in the demand for your package service. The demand for the package services seems to be more inelastic than the demand for parcels. You are now wondering if you should charge different prices for the parcel and package service or should you segment the market and charge two different prices? Complete the tables below and determine the best price strategy: price the services differently in each segment; or continue the one price policy? The Parcels Market Price Parcels TR MR TC MC MR-MC…
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