2. At the price of $15, Zeke were able to sell 7,000 ball pens. When he increased the price by $1O, he sold only 5,000 pens. What is the demand elasticity? If his marginal cost is $3 per pen, what is his desired markup and what is his initial actual markup? Was raising the price profitable?

2. At the price of $15, Zeke were able to sell 7,000 ball pens. When he increased the price by $1O, he sold only 5,000 pens. What is the demand elasticity? If his marginal cost is $3 per pen, what is his desired markup and what is his initial actual markup? Was raising the price profitable?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: You are the only seller of eggs In town, and the price-elasticity coefficient for eggs is known to…

A: Demand is a curve that depicts the indirect relationship between two variables namely price and…

Q: Assume that you are in an interview session and the panel asks you to give a pricing decision that…

A: In a perfect market, equilibrium would be at a point where demand equals supply.

Q: Move the orange points on the graph to show the area represents the firm's total revenue when price…

A: The demand(DD) curve slopes downwards which indicates an inverse correlation between price(P) and…

Q: When the price of a trampoline was $636, the quantity demanded was 710 trampolines per month. Later,…

A: Given information: When the price of a trampoline was $636, the quantity demanded was 710…

Q: What does price elasticity of supply measure? how responsive price is to a change in quantity…

A: The total amount of a certain commodity or service available to consumers is referred to as supply.…

Q: Calculate the markup price if MC = $10 and price elasticity equals -2.

A: Mark-up will be computed as difference between the item's selling price and the cost as a percentage…

Q: Consider a firm that estimates that its price elasticity of demand equals -1.5. Price equals $36 and…

A: Elasticity of demand measures the quantitative change in the demand in response to the change in the…

Q: Calculate the price elasticity of demand? What will happen to the total revenue if the seller…

A: There exists a relationship between the average revenue(AR), which is basically the price(P), the…

Q: 6) Suppose you are in charge of sales at Novartis (the largest pharmaceutical compa-ny) and your…

A: The responsiveness of the quantity of a good or service's demand to a change in price is known as…

Q: How can we increase the Total Revenue of products using elasticity? Explain by giving examples. Give…

A: The way to maximize the revenue is to identify the elasticity of demand. TR is the product of Prices…

Q: You are the manager of a popular hat company. You know that the advertising elasticity of demand for…

A: Price elasticity of demand refers to the responsiveness of the quantity demand due to change in the…

Q: Can you think of an industry (or product) with near infinite elasticity of supply in the short term?…

A: The response of a good or service's supply to a change in its market price is measured by its price…

Q: The price of widgets has gone from 2.00 to 5.00 in six months, while the quantity purchased of…

A: Cross price elasticity measures the %change in demand of a good due to unit % change in price of…

Q: Baylor Lumber sold 10 ft long metal feed bunks at $300 per bunk last month. They sold 20 bunks. This…

A: The price elasticity is calculated as the percentage change in quantity demanded divided by the…

Q: You want to estimate the price elasticity of demand for sandwiches at the restaurant you manage. In…

A: Answer: Given, Price Quantity $6.50 per sandwich 500 sandwiches $6 per sandwich 581…

Q: George has been selling 5,000 T-shirts per month for $8.50. When he increased the price to $9.50, he…

A: It is given that, Q1 = 5000, P1 = $8.50, Q2 = 4000, and P2 = $9.50. Therefore, the elasticity of…

Q: The Corvette When the C8 Corvette first arrived back in June of 2019, the world was shocked to see…

A: Price elasticity of demand refers to the percentage change in quantity demanded with respect to…

Q: Suppose that the demand for a new soft drink is given by a nonlinear demand function: Q(P, A) = P¹/2…

Q: y Petbarn is currently trading in a market where they face an own-price elasticity of demand which…

A: Optimal price can be described as the point of price at which a firm can maximize its profits or…

Q: You sell two different goods: printers and toner catridges. The prices elasticity od demand for the…

A: The elasticity of demand measures the responsiveness of quantity demanded of a good to a change in…

Q: hen offering discounts and sales on their products managers have to take into account price…

A: The price elasticity of demand for a good is a measure of how price affects the quantity demanded.…

Q: What would the gasoline price elasticity of supply mean to UPS or FedEx?

A: The supply elasticity of a commodity provides a quantifiable relationship between its supply and its…

Q: 7. The Sylvan Corporation has estimated the price elasticity of demand for synthetic wood sorrel to…

A: 7) Buyers respond to prices in a way such that when the price increases they demand less of the…

Q: Joe, if Connecting U drops its price by another 10 percent, how will their customers change their…

A: Demand is the total quantity of products and services for which the customers are willing to…

Q: 1. A firm is currently charging a price of $150 and is considering a price change. They currently…

A: The demand curve shows the inverse relationship between price and quantity demanded. The demand…

Q: The price elasticity of supply is more likely to be Select one: High if it is calculated over a…

A: Price elasticity of supply measures the responsiveness in quantity supplied of a commodity to a…

Q: The manager of the Sell-Rite drug store accidentally mismarked a shipment of 20-pound bags of…

A: When the price (P1) is $ 5.18, the firm normally sells (Q1) 150 bags per week. When the price (P2)…

Q: Calculate the price elasticity of demand for mobile telephones where the quantity sold decreases…

A: "Since you have asked multiple questions, we will solve first question for you .. If you want any…

Q: a. If the firm wishes to maximize its total revenue, at what price should it sell its pots? 12 x…

A: Elasticity measures the percentage change in quantity due to percentage change in price. The price…

Q: thought for part (a) the Q will equal to 166. and for part (b) isnt the price elasticity equal to…

A: Price elasticity of demand measures the degree of responsiveness of the change in quantity demanded…

Q: Consider two scenarios giving some information about price elasticity of demand. For each scenario,…

A: The increase in the quantity of an item demanded or consumed in accordance to its change in price is…

Q: Calculate the optimal markup price if MC = S10.00 and price elasticity = -1.7. %3D $5.88 $24.27…

A: P = MC (1/(1 + 1/e))

Q: George has been selling 5,000 T-shirts per month for $8.50. When he increased the price to $9.50, he…

A: Given: George sells T-shirts per month = 5,000 The selling cost for T-shirts is = $8.50 The price…

Q: D) TC = 8Q² + 9Q + 16 MC = 16Q + 9 MR 329 a) Profit maximizing quantity ? b) Total cost at profit…

Q: Price Quantity (dollars per demanded bushel) (bushels) 8 2,000 7 4,000 6 6,000 5 8,000 4 10,000 3…

A: At $6 the quantity demanded is 6000 bushels, at $7 the quantity demanded is 4000 bushels.

Q: The demand curve for a product is given by Q = 1,200 Where P,= SR300. a. What is the own price…

A: The change in demand for a good brought on by a change in price over a specific time period is…

Q: If Carmen's Coffee Company wants to increase total revenue and the price elasticity of demand is…

A: Introduction : Demand elasticity consists of the degree to which goods' quantity demanded changes on…

Q: SOLVE FOR ELASTICITY. You need to solve all the blank spaces after the quantity demanded column. You…

A: Point Price Quantity Demanded F 8 0 A 7.2 10 B 4 50 C 0.8 90 G 0 100

Question

2. At the price of $15, Zeke were able to sell 7,000 ball pens. When he increased the price by $10, he sold only 5,000 pens. What
is the demand elasticity? If his marginal cost is $3 per pen, what is his desired markup and what is his initial actual markup? Was
raising the price profitable?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Demand and Supply Schedules for Papaya Price $ Quantity demanded Quantity Supplied 4 36,000 4,000 8 32,000 8,000 12 28,000 12,000 16 24,000 16,000 20 20,000 20,000 24 16,000 24,000 28 12,000 28,000 32 8,000 32,000 36 4,000 36,000 Calculate the price elasticity of supply for mangoes when the price changes from$24 to $28.
Subject: e
ok int rences Mc Graw Hill Aruna owns Pottery Plus, a small firm that produces terra cotta pots for sale in the Edmonton area. The graph below shows Aruna's demand curve. Price ($) 40 36 32 28 24 20 16 12 8 4 0 4 8 W (38, 19) 12 16 20 24 28 32 36 40 Quantity per period O Search > 3 of 6 SAMSUNG www Next >
LawnTech sells its laser hedge trimmer at a price of $275, and estimates price elasticity of demand at -3.9 at this price. LawnTech is thinking about raising its price by +4.0%. By what percent will Quantity sold change, given this change in price? Report your answer as a percent. Report 25.5%, for example, as "25.5". Remember to report the sign of the change. Rounding: tenth of a percent. Your Answer: Answer
Price $1 0 D=MR Quantity Firm A O Multiple Choice Price $ O MR Refer to the diagrams. The demand for Firm B's product is Quantity Firm B perfectly inelastic over all ranges of output. elastic for prices above $4 and inelastic for prices below $4. inelastic for prices above $4 and elastic for prices below $4. perfectly elastic over all ranges of output.
i need in words not handwritten solution please
Solve it early
George has been selling 7,000 T-shirts per month for $7.00. When he increased the price to $9.00, he sold only 6,000 T-shirts. Which of the following best approximates the price elasticity of demand? -0.6769 -0.6154 -0.3077 -0.5538 Suppose George's marginal cost is $4 per shirt. Before the price change, George's initial price markup over marginal cost was approximately . George's desired markup is . Since George's initial markup, or actual margin, was than his desired margin, raising the price was
A topic on optimal pricing, elasticity, stay-even analysis, or cost-based pricing.
Answer the question using the 3 -step approach 2. Due to Covid 19, there has been a major delay with the shipping lines causing an increase in shipping costs for major retailerShipping cost is a major cost component for shea products. How will Covid affect the supply and demand for Shea products? 3. A 12 % increase in the price of fuel reduces the quantity of fuel demanded by 3 %. What is the price elasticity of demand for fuel?What can you say about elasticity?
Suppose that over a range of prices, the price elasticity of demand varies from 15.0 to 2.5. Over another range of prices, the price elasticity of demand varies from 1.5 to 0.75. What can you say about total revenues and the total revenue curve over these two ranges of the demand curve as price falls?
2. PR sells phones for £400 and has observed a recent drop in sales from 1,500 units a month, reducing its revenue by £120,000. This has occurred because a competitor has just reduced its price by 20%. PR wants to restore its sales volume to its previous level, and has estimated its price and cross elasticities at -1.4 and 0.8 respectively. The phones have a marginal cost of £280. a) Calculate the sales level of PR after the reduction in the competitor's price, assuming PR maintains its price. b) Calculate the necessary price for PR to charge to achieve its objective, assuming the competitor's price reduction. c) Calculate the effects of the decisions in a) and b) above on profit compared with the original profit before the drop in sales. Which is the better decision?