A company estimates that the weekly sales q of its product is related to the product's price p by the function q= 11900 10 where p is in dollars. Currently, each unit of the product is selling for $5. a. Determine the point elasticity of demand of this product. (Do not round e; answer exactly.) The point elasticity of demand is & = Round these next two parts to the nearest whole number. b. Determine the effect on revenue if the price were decreased by 1%. If the price were decreased by 1%, the revenue will Select an answer by $ c. Determine the effect on revenue if the price were decreased by 5%. If the price were decreased by 5%, the revenue will Select an answer by $ Select d

A company estimates that the weekly sales q of its product is related to the product's price p by the function q= 11900 10 where p is in dollars. Currently, each unit of the product is selling for $5. a. Determine the point elasticity of demand of this product. (Do not round e; answer exactly.) The point elasticity of demand is & = Round these next two parts to the nearest whole number. b. Determine the effect on revenue if the price were decreased by 1%. If the price were decreased by 1%, the revenue will Select an answer by $ c. Determine the effect on revenue if the price were decreased by 5%. If the price were decreased by 5%, the revenue will Select an answer by $ Select d

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 a research report has estimated the demand for a firm's product as ln QXd = 7 − 1.5 ln PX + 2 ln PY − 0.5 ln M + ln A where:Px = $15Py = $6M = $40,000, andA = $350 a. Determine the own price elasticity of demand, and state whether demand is elastic, inelastic, or unitary elastic. Own price elasticity: -1.5 Demand is: elastic b. Determine the cross-price elasticity of demand between good X and good Y, and state whether these two goods are substitutes or complements. Cross-price elasticity: 2 These two goods are: Substitutes. c. Determine the income elasticity of demand, and state whether good Xis a normal or inferior good. Income elasticity: Good X is: d. Determine the own advertising elasticity of demand.
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Answer only subpart 4
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Suppose Amazon lowers its Prime membership monthly fee from $12.99 to $9.99. The price elasticity of demand for Amazon membership subscription in this price range is estimated at -0.8. You predict that the number of Prime subscriptions will (increase/decrease) increase Aby (enter a number rounded to one digit after the decimal point, e.g., 22.2) A/ % and that Amazon's revenue will (increase/decrease) A by (enter a number rounded to one digit after the decimal point, e.g., 9.9) A %.
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Suppose the demand function for a firm's product is given by In Qxd = 7 -1.5 In Px + 2 In Py-0.5 In M + In A where: Px = $15 Py = $6 M = $40,000, and A = $350 a. Determine the own price elasticity of demand, and state whether demand is elastic, inelastic, or unitary elastic. Own price elasticity: Demand is: (Click to select) b. Determine the cross-price elasticity of demand between good X and good Y, and state whether these two goods are substitutes or complements. Cross-price elasticity: These two goods are: (Click to select) c. Determine the income elasticity of demand, and state whether good X is a normal or inferior good. Income elasticity: Good X is: (Click to select) d. Determine the own advertising elasticity of demand.
Demand function Q=120-4p…. QUESTION IS… Find interval of quantity demand where price and total revenue are increase
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Economic
ABC Manufacturing has determined that the demand function for their heated socks is given by: 6 D(p) = 170 --p². a. Find E(p), the Elasticity of Demand as a function of price, p. E(p) = b. Find the Elasticity of Demand when heated socks are selling at a price of $5. Give result accurate to at least 3 decimal places. E(5) c. At this price ($5): We would say the demand for heated socks is: [Select an answer Based on this, in order to increase revenue we should: [Select an answer d. Use the Elasticity model to determine the price that maximizes revenue. (Round result to 2 decimal places.) P =