A company's product has unitary flexibility. Should the company alter the pricing of its goods during the movement control order (MCO) in order to increase revenue
Q: For the following demand equation compute the elasticity of demand and determine whether the demand…
A: Elasticity of demand measures the percentage change in quantity demanded in response to a one…
Q: For the following demand equation compute the elasticity of demand and determine whether the demand…
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A: We will answer only the first question.
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A company's product has unitary flexibility. Should the company alter the
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- Prove that price elasticity of demand is not the same as the slope of a demand curve.If an increase in the supply of a product results in a decrease in the price, but nochange in the actual quantity of the product exchanged, then:A) the price elasticity of supply is zero.B) the price elasticity of supply is infinite.C) the price elasticity of demand is unitary.D) the price elasticity of demand is zero.The price elasticity of supply for basmati rice (an aromatic strain of rice) is likely to be which of the following? multiple choice Higher in the long run than the short run, because farmers cannot easily change their decisions about how much basmati rice to plant once the current crop has been planted. Low in both the long and short runs, because rice farming requires only unskilled labor. High in both the long run and the short run, because the inputs required to produce basmati rice can easily be duplicated. High, because consumers have a lot of other kinds of rice and other staple foods to choose from.
- You start a business making decorative reusable water bottles. Suppose the demand for the bottles is modeled by the equation q = V15 – 2p where p is the price per bottle and q is the number of bottles sold per week. Suppose that your cost of materials for each bottle is 3 dollars. a) Calculate the price elasticity of demand when p = 3. Write a sentence explaining what this means in terms of the demand and the price. b) Find the range of prices for which demand is inelastic (assume p < 0) c) Find the price that would maximize your revenue. d) Find the price that would maximize your profit. (Include steps justifying that this is a maximum).If a manufacturer sets the price of the good at $ 10, he can sell 300 of this item in a year. If the producer raises the price of his good to $ 12, the sales amount remains at 240. i) What is the spring (arc) elasticity value of the demand for the product in question? ii) What is the point elasticity value of the demand for the good in question?Below is a graph for the market for product X for a specified time period. Calculate the price elasticity of demand for good X between points E and B. Calculate the price elasticity of demand for good X between points E and B. What type of elasticity is calculated (elastic, inelastic, or unitary)? What does this type of elasticity indicate for product X demand?
- A good with no close substitutes is predicted to have relatively inelastic demand, since consumers cannot easily switch to a substitute good if the price of the good were to increase. The price elasticity of demand of a good depends in part on its relative necessity in comparison to other goods. Assume the following goods all have approximately the same price. Which of the goods has the most elastic demand? The price elasticity of demand for a good also depends on how the good is defined. Self-driving cars Access to medicine for individuals with chronic illnesses Using the following table, organize the goods by indicating which you predict to have the most elastic demand, the least elastic demand, and the elasticity of demand that falls somewhere in between. Categories Most Elastic In Between Least Elastic O O Food Produce Strawberries O The price elasticity of demand of a good is also impacted by the defined time horizon. All else equal, the demand for natural gas will tend to be less…the consumer demand for a given product (where x represents number of units and “p” represents price is money) given by the function: x=(45-3p)^2 a) using the concept of elasticity of demand, determine the price that the product should be sold at to maximize revenue. round to the nearest 10th b) what is the elasticity of demand (ecp) ?With regard to elasticities of demand: Group of answer choices: A) price elasticity should actually be the sole basis for pricing decisions. B) price elasticity = % change in price divided by % change in quantity. C) price increases result in revenue increases if demand is price inelastic. D) price decreases result in revenue decreases if demand is price elastic.
- Suppose that a store decreases the price of laundry detergent from $4.10 to $3.50. As a result, quantity demanded increases from 210 to 230. a) Using the mid-point approach, calculate the percentage change in price. b) Using the mid-point elasticity approach, calculate price elasticity of demand. Your answer should be expressed in absolute value terms.Suppose you own a bookstore. You believe that you can sell 40 copies per day of the latest John Grisham novel when the price is $35. You consider lowering the price to $25 and believe this will increase the quantity sold to 50 books per day. Compute the price elasticity of demand using the midpoint formula and these data. Predict what will happen to your revenue if you reduce your price.Suppose a 10 cent change in price induces a 1000 unit change in willingness to consume. At a price of 2.00, 1000 units are demanded. Find the price elasticity of demand
