A manufacturer sells two products, A and B and had raised the prices of the twoproducts recently to cover the higher production costs. The price and quantity foreach product before and after the price change is given in the table below.Initial Quantity New PriceNew QuantitydemandedProductInitial Pricedemanded$250$300$750A280200B$6005045Calculate the price elasticity of demand for both products using the midpointmethod. Comment on their elasticities and explain two (2) possible reasons whythey are different. What should the manufacturer do to the prices of the twoproducts if the objective is to earn more revenue?

In economics, price elasticity of demand is a measure of the change in a product's consumption when…

A manufacturer sells two products, A and B and had raised the prices of the two products recently to cover the higher production costs. The price and quantity for each product before and after the price change is given in the table below. Initial Price Initial Quantity | New Price New Quantity demanded 200 45 Product demanded $250 $600 $300 $750 А 280 B 50 Calculate the price elasticity of demand for both products using the midpoint method. Comment on their elasticities and explain two (2) possible reasons why they are different. What should the manufacturer do to the prices of the two products if the objective is to eam more revenue?

A manufacturer sells two products, A and B and had raised the prices of the two products recently to cover the higher production costs. The price and quantity for each product before and after the price change is given in the table below. Initial Price Initial Quantity | New Price New Quantity demanded 200 45 Product demanded $250 $600 $300 $750 А 280 B 50 Calculate the price elasticity of demand for both products using the midpoint method. Comment on their elasticities and explain two (2) possible reasons why they are different. What should the manufacturer do to the prices of the two products if the objective is to eam more revenue?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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am. 111.