Suppose that the price of a good changes from 10 dollars to 20 dollars while the quantity demanded changes from 200 units to 125 units. Therefore, the arc price elasticity of demand is: OA -0375 OB -0692 OC 0012 OD -1200

Q3. Refer to the diagram. Using the midpoint formula, calculate the price elasticity of demand between the prices of $15 and $12. Accordingly, state whether demand is elastic or inelastic between these two points. P$/unit 15 12 D 18 22 Q (units/week) Ep = Damand ie ... Q4. For each case below, answer the bolded questio Classification of the Case Calculations product(s) if requested to do so 1. Suppose that a 2% increase in income in the economy decreases the quantity of gadgets demanded by 1% ar every E,= Gadgets are possible price. Find the income elasticity of demand and dassify the product accordingly (state whether gadgets is a normal, necessity, luxury or an inferior product). 2. A firm finds that its price elasticity of demand is 4.0. Currently, the firm is selling 2000 units per month at $5 per unit. Price must be lowered by= If it wishes to increases its quantity sold by 10%, by how much it must lower its price? 1 Suppose legalization-and subseque nt regulation-of products Xand…

The company is considering lowering the price of Model A to $27 in an effort to increase the number of units sold. Based on the results of price changes that have been instituted in the past, Tennis Products’ chief economist estimates the arc price elasticity of demand to be –2.5. Furthermore, she estimates the arc cross elasticity of demand between Model A and Model B to be approximately 0.5 and between Model A and Model C to be approximately 0.2. Variable costs per unit are not expected to change over the anticipated changes in volume. a. Evaluate the impact of the price cut on the (i) total revenue and (ii) contribution margin of Model A. Based on this analysis, should the firm lower the price of Model A? Explain b. Evaluate the impact of the price cut on the (i) total revenue and (ii) contribution margin for the entire line of tennis rackets. c. Based on this analysis, should the firm lower the price of Model A? Explain

-0.03 The short-term demand for crude oil in Country A in 2008 can be approximated by q = f(p) = 2,000,569p where p represents the price of crude oil in dollars per barrel a represents the per capita consumption of crude oil. Calculate and interpret the elasticity of demand when the price is $76 per barrel. The elasticity of demand for oil is. (Type an integer or a decimal.) What is the elasticity of demand for oil when the the price is $76 per barrel? 1 (Type an integer or a decimal.) Interpret the elasticity of demand. Choose the correct answer below. O A. The demand is elastic, so as price increases, revenue decreases. O B. The demand is elastic, so as price increases, revenue increases. OC. The demand is inelastic, so as price increases, revenue increases. OD. The demand is inelastic, so as price increases, revenue decreases.

The Potomac Range Corporation manufactures a line of microwave ovens costing $500 each. Its sales have averaged about 6,000 units per month during the past year. In August, Potomac's closest competitor, Spring City Stove Works, cut its price for a closely competitive model from $600 to $545. Potomac noticed that its sales volume declined to 4,500 units per month after Spring City announced its price cut.   a) What is the arc cross elasticity of demand between Potomac's oven and the competitive Spring City model?   b) If Potomac knows that the arc price elasticity of demand for its ovens is −2.0, what price would Potomac have to charge to sell the same number of units it did before the Spring City price cut?

When the price of candy bars increased from $0.45 to $0.55, the quantity demanded changed from 21,000 per day to 19,000 per day. In this price range, the price elasticity of demand coefficient (based on the midpoint formula) for candy bars is A) -1. B) -0.18. (C) -2. D -0.5.

The price elasticity of demand for a textbook sold in the United States is estimated to be -2, whereas the price elasticity of demand for books sold overseas is -3. The U.S. market requires hardcover books with a marginal cost of $40; the overseas market is normally served with softcover texts on newsprint, having a marginal cost of only $15. The profit-maximizing price in the U.S. market is   and the profit-maximizing price in the overseas market is   . (Hint: Remember that MR=P×(1+1ED)MR=P×1+1ED)

The demand for office chairs in thousands is Q=40-2 P2 At a price of $2, the price elasticity of demand is: Selected Answer: -0.25.