1. Estimates of the marginal cost of Daraprim are S100 for a 100 pill bottle. If Turing charges $75,000per bottle, what is the elasticity of demand that Turing believed it faced? You need to know that (P-MC)/P = 1/el, where le is the absolute value of the elasticity of demand.2. Estimate a linear demand curve for Daraprim of the form P- mQ + b.

Relationship between price, marginal cost, and the price elasticity of demand. (P - MC) / P = 1 / I…

Answered: 1. Estimates of the marginal cost of…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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suppose the price of a product rises from 10 to 14 dollars and, as a result, the quantity demanded falls from 15 to 5 units. using the market midpoint formula, the absolute value of the elasticity of demand for this product is equal to a.) 2.5 b.) 3 c.) 1 d.) 1/3
When the price of the jeans was $58 each, the shop sold 100 per month. When they reduced the price to $22 each, they sold 300 per month. Using the midpoint method, the price elasticity of demand for jeans is? The result should be given to two decimal places (e.g. if the result is 3.678, write 3.68, if the result is -3.673, write -3.67.) Your Answer:
Exercise : Following an increase in it's price, from 10$ to 12$, the demand for a good falls from 10500 to8100 units.What elasticity of demand would you estimate from these data? Calculate its value, first by using the general formula (for discrete changes), then by assuming a constantconstant elasticity of demand (log formula).Calculate the demand for p=9 (note q9 the quantity for p=9), using the general formula then in log of the elasticity calculated in Now, Knowing the value of the direct price elasticity of demand calculated previously, assuming constant costs andcosts and rivals not responding to your price cut, would you have recommended the price cut from 10 to 9?price cut from 10 to 9 ?
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The demand function for a certain make of ink-jet cartridge is the following where p is the unit price in dollars and x is the quantity demanded each week, measured in units of a thousand. p= -0.02x² -0.2x+6 Compute the elasticity of demand when x = 11. (Round your answer to two decimal places.) 0.22 Determine whether the demand is inelastic, unitary, or elastic when x = 11. elastic inelastic O unitary
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Suppose the demand for selling a Nintendo Switch console at a price p is modeled by the function ri8, D(p) = V450 -p for 0
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1. Estimates of the marginal cost of Daraprim are S100 for a 100 pill bottle. If Turing charges $75,000 per bottle, what is the elasticity of demand that Turing believed it faced? You need to know that (P- MC)/P- 1/le, where le is the absolute value of the elasticity of demand.