10 (Note: Point A is the midpoint of the demand curve) 8. 7. 6. 4 Demand 23456 Pounds of cheese at At Point A the elasticity of demand is -1 Figure 13.3 1) Refer to Figure 13.3. The marginal revenue of the fourth pound of cheese is 3 pound of cheese total revenue- 3x7-21 4 pound total revenue= 4x6-24 Marginal revenue 4 pound 24-21- 2) Refer to Figure 13.3. The marginal revenue of the sixth pound of cheese is 5* total revenue= Sx5-25 6 tolal revenue- 6x4-24 Marginal revenue 6* pound 24-25- 3) Refer to Figure 13.3. This firm's total revenue will be maximized at a price of total revenue will be 25 4) Refer to Figure 13.3. This firm's marginal revenue will be positive at 5) Refer to Figure 13.3. This fim's marginal revenue will be negative at

10 (Note: Point A is the midpoint of the demand curve) 8. 7. 6. 4 Demand 23456 Pounds of cheese at At Point A the elasticity of demand is -1 Figure 13.3 1) Refer to Figure 13.3. The marginal revenue of the fourth pound of cheese is 3 pound of cheese total revenue- 3x7-21 4 pound total revenue= 4x6-24 Marginal revenue 4 pound 24-21- 2) Refer to Figure 13.3. The marginal revenue of the sixth pound of cheese is 5* total revenue= Sx5-25 6 tolal revenue- 6x4-24 Marginal revenue 6* pound 24-25- 3) Refer to Figure 13.3. This firm's total revenue will be maximized at a price of total revenue will be 25 4) Refer to Figure 13.3. This firm's marginal revenue will be positive at 5) Refer to Figure 13.3. This fim's marginal revenue will be negative at

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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9 Sony is considering a 10 percent price reduction on its HD TV sets. If the price-elasticity coefficient for the sets in this price range is 0.75, then the price cut will cause Multiple Choice sales quantity to increase and revenues to also increase. seles quantity to increase but revenues to decrease. sales quantity to decrease and revenues to also decrease Seved sales quantity to decrease but revenues to increase
6. Elasticity and total revenue The following graph shows the daily demand curve for bikes in San Francisco. Use the green rectangle (triangle symbols) to compute total revenue at various prices along the demand curve. Note: You will not be graded on any changes made to this graph. *graph 1* On the following graph, use the green point (triangle symbol) to plot the annual total revenue when the market price is $30, $45, $60, $75, $90, $105, and $120 per bike. *graph 2* According to the midpoint method, the price elasticity of demand between points A and B is approximately ___ . Suppose the price of bikes is currently $30 per bike, shown as point B on the initial graph. Because the demand between points A and B is ___ , a $15-per-bike increase in price will lead to ___ in total revenue per day. In general, in order for a price decrease to cause a decrease in total revenue, demand must be ____.
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13) . Consider the following supply schedule for shoes. Price Quantity Supplied $5 425 $10 445 $15 465 $20 485 $25 505 $30 525 $35 545 $40 565 Suppose that the price of shoes increases from $25 to $30. Using the mid-point approach, calculate price elasticity of supply.
1. Jeff Jones at Ice ‘n Carry ('InC') Coolers reduced the price of InC coolers by $10 from the usual $40. Weekly sales increased from 10 to 20 InC Coolers per week. a. What is the arc price elasticity of demand? b. Jeff is considering a further price reduction. What would be the effect of the reduction on revenues? How about profits? Revenues: Profits: Increase/ Decrease / Can't tell Increase/ Decrease / Can't tell
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m 18 of 21 > (Figure: The Demand for e-Books) Use Figure: The Demand for e-Books. What is the price elasticity of demand (by the midpoint method) when the price increases from $6 to $8? Figure: The Demand for eBooks Price $10 8 6 8+ 2.33 0.55 0.5 0.67 40 D 50 Quantity
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6:357 A webassign.net In this problem, p is in dollars and q is the number of units. (a) Find the elasticity of the demand function p + 2p + q = 100 at p = 9. (b) How will a price increase affect total revenue? O Since the demand is unitary, there will be no change in the revenue with a price increase. O Since the demand is inelastic, an increase in price will decrease the total revenue. O Since the demand is elastic, an increase in price will decrease the total revenue. Since the demand is inelastic, an increase in price will increase the total revenue. Since the demand is elastic, an increase in price will increase the total revenue. Need Help? Read it