8.4 Price-Volume Pricing (Figures 8-23 to 8-25) The price elasticity for personal computers is estimated to be –2. For the PC manufacturer shown, evaluate the sales and profit impact of a 10% price increase and a 10% price decrease. For each pricing strategy, determine the break-even market share and discuss the profit risk associated with it.

In one month, a Pizza Hut restaurant sold 5500 personal pizza at RO 4.50 per pizza. When this restaurant increased its price by 30%, its total revenue for the next month increased to RO 18,720. As a result of this price increase, however, the monthly sales of POP decreased from 3500 to 3000 cans. Using the arc elasticity method: (i) Find the own price elasticity of demand for this restaurant’s pizza. (ii) Find the cross elasticity of demand for pop with respect to the price of the pizzas. Are the two substitutes or compliments?

Suppose you did an analysis regarding the sensitivity of tea to the price of tea. You estimated the price elasticity of demand to equal 0.5. Explain this finding

Worldwide annual sales on smart phones over a two year period were approximately q=-5p+3090 million phones at the selling price of $p per phone. (a) obtain a formula for the price elasticity of demand E. E=______ (b) in one of the years the actual selling price was $355 per phone. What was the corresponding price elasticity of demand? E=______ The demand is going (up/down) by about _____% per 1% increase in that price level.

PRICE (Delars per tor 18 24 M 4 12 24 QUANTITY (Thousands of tons) Supply Demand O Total Revenue (Thousands of Dollars) Demand Supply Several growers are happy with this advancement in technology because now they can sell more crops, which they believe will lead to increases in revenue. Using elasticities, you will be able to determine whether this price change will lead to a rise or fall in total revenue in this market. Using the midpoint method, the price elasticity of demand for pistachios between the price levels of $15 and 59 per ton is 0.33, meaning that between these two points, demand is inelastic. Thus, you can conclude that the grower's claim is incorrect because total revenue will increase due to the technological improvement. Confirm your previous conclusion by calculating total revenue in the pistachio market before and after the technological improvement. Enter these values in the following table. Before Technological Improvement After Technological Improvement

The price elasticity of demand for air travel differs radically from first-class (-1.3) t to restricted discount coach (-1.8). Given these elasticities, what will be the difference between the optimal prices (fares) of first class and discount coach on a cross-country trip with incremental variable costs (marginal costs) equal to $120?

The price elasticity of demand for a product is 0.51. A percentage change in price is 17%. The initial quantity of the product is 190 units. Calculate the new quantity of the product, and use the midpoint method