5) Double Take Beauty Double Take Beauty is a spa in Provo, UT that offers single needle tattoos done by its founder, Sadie Flores. Suppose Sadie charges about $400 per tattoo on average. The marginal cost of each tattoo is about $100. She is getting better at tattooing and the tattoos are becoming more popular with customers, so she is considering raising the price to $500 per tattoo. What percentage of customers must be retained to ensure that the price increase is profitable? Note: It's conventional when not calculating elasticities to measure percentage changes relative to their initial value (%AX = new value of X-old value of X old value of X 25% 18% 84% 66.67% 75%

5) Double Take Beauty Double Take Beauty is a spa in Provo, UT that offers single needle tattoos done by its founder, Sadie Flores. Suppose Sadie charges about $400 per tattoo on average. The marginal cost of each tattoo is about $100. She is getting better at tattooing and the tattoos are becoming more popular with customers, so she is considering raising the price to $500 per tattoo. What percentage of customers must be retained to ensure that the price increase is profitable? Note: It's conventional when not calculating elasticities to measure percentage changes relative to their initial value (%AX = new value of X-old value of X old value of X 25% 18% 84% 66.67% 75%

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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