Assume lawyer services have an elasticity of demand of 0.5 in absolute value. Currently, a lawyer charges $300 per consultation and she has 100 consultations per week. If she raises her rate to $450 per consultation (a 50% increase) her revenue will (use the general formula for elasticity not the midpoint formula)
Assume lawyer services have an elasticity of demand of 0.5 in absolute value. Currently, a lawyer charges $300 per consultation and she has 100 consultations per week. If she raises her rate to $450 per consultation (a 50% increase) her revenue will (use the general formula for elasticity not the midpoint formula)
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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