1. AZ Burger is a new burger stall that operates from 6pm to 12am at a residential area. They are trying to determine the best price for their signature products, the Crispy Chicken Burger. After 2 months of testing the market, the have discovered the following demand and supply conditions for the product: Price (MYR) Quantity Demanded (QD) Quantity Supplied (QS) 3.00 2,500 900 3.50 2,100 1,100 4.00 1,500 1,500 4.50 1,100 2,100 5.00 900 2,500

1. AZ Burger is a new burger stall that operates from 6pm to 12am at a residential area. They are trying to determine the best price for their signature products, the Crispy Chicken Burger. After 2 months of testing the market, the have discovered the following demand and supply conditions for the product: Price (MYR) Quantity Demanded (QD) Quantity Supplied (QS) 3.00 2,500 900 3.50 2,100 1,100 4.00 1,500 1,500 4.50 1,100 2,100 5.00 900 2,500

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 8E: The Stopdecay Company sells an electric toothbrush for $25. Its sales have averaged 8,000 units per...

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The Stopdecay Company sells an electric toothbrush for $25. Its sales have averaged 8,000 units per month over the past year. Recently, its closest competitor, Decayfigh ter, reduced the price of its electric toothbrush from $35 to $30. As a result, Stopde cays sales declined by 1,500 units per month. What is the arc cross elasticity of demand between Stopdecays toothbrush and Decayfighters toothbrush? What does this indicate about the relationship between the two products? If Stopdecay knows that the arc price elasticity of demand for its toothbrush is 1.5, what price would Stopdecay have to charge to sell the same number of units as it did before the Decayfighter price cut? Assume that Decayfighter holds the price of its toothbrush constant at $30. What is Stopdecays average monthly total revenue from the sale of electric toothbrushes before and after the price change determined in part (b)? Is the result in part (c) necessarily desirable? What other factors would have to be taken into consideration?
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1
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1. When the price of butter increases from $1 to $2, the quantity demand of margarine increases from 6 to 8. What is the cross-price elasticity of demand? A) (6-8)/8 (1-2)/2 (8-6)/6 (2-1)/₁ (1-2)/2 (8-6)/ B) D) (2-1)/₁ (6-8)/8
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