Answered: n a burns-road food street, there is a…

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter3: Demand Analysis

Section: Chapter Questions

Problem 7E: In an attempt to increase revenues and profits, a firm is considering a 4 percent increase in price...

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In a burns-road food street, there is a youngest 12-year-old entrepreneur. His most recent venture is selling homemade pasta that his mother makes. At price of Rs. 60 each he sells 100. At price 40 each he sells 300. Is this demand elastic or inelastic in this range, explain? If demand has the same elasticity for the price decline from 60 - 40, would cutting the price from 40 to 20 will further increase or decrease his total revenue. Please explain?

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