Answered: As a producer, how would you use the…

Business

Economics

As a producer, how would you use the information about elasticity to maximize your revenue? Explain.

Microeconomics: Principles & Policy

14th Edition

ISBN:9781337794992

Author:William J. Baumol, Alan S. Blinder, John L. Solow

Publisher:William J. Baumol, Alan S. Blinder, John L. Solow

Chapter6: Demand And Elasticity

Section: Chapter Questions

Problem 4DQ

See similar textbooks

Related questions

Q: Calculate the price elasticity of demand? What will happen to the total revenue if the seller…

A: There exists a relationship between the average revenue(AR), which is basically the price(P), the…

Q: How can we increase the Total Revenue of products using elasticity? Explain by giving examples. Give…

A: The way to maximize the revenue is to identify the elasticity of demand. TR is the product of Prices…

Q: If there are 10 bakeries in a small city, why might the elasticity of demand for the products any…

A: The price elasticity of demand measures the responsiveness of quantity demanded to a change in…

Q: If a firm wanted to know whether the demand for its product was elastic, unit-elastic, or inelastic,…

A: Elasticity and revenue are related. If a good has low elasticity, an increase in price increases…

Q: How does the price elasticity of demand for a product affect the revenue?

A: Price elasticity of demand tells us how changes in the price of a particular product affect quantity…

Q: As a producer, how would you use the information about elasticity to maximize your revenue? Explain.…

A: Elasticity is the responsiveness of change in quantity due to change in price. Total Revenue is the…

Q: Suppose that the inverse supply and demand for pork are given by: P = 800 - 2Qd and P-200+2Qs, where…

Q: Define elasticity of demand and discuss its type with the help of examples

A: The elasticity of demand refers to the responsiveness of the quantity demanded for a good or service…

Q: What does the price elasticity of supply for a theme park look like?

A: In business and economic aspects, price elasticity alludes to how much people, shoppers, or makers…

Q: As a producer, how would you use the information about elasticity to maximize your revenue? Explain

A: The revenue of the firm is calculated as price multiplied by the Quantity (TR = P * Q). It means…

Q: How does the elasticity of a product impact Corporate Revenue? Why is it important for companies to…

A: The elasticity of a product describes the sensitivity of its quantity demanded or supplied to…

Q: The elasticity of Supply is an important concept in Microeconomics as it relates to a business's…

A: The elasticity of supply is defined as the responsiveness of the quantity supplied to a change in…

Q: When the price changes, the change in producers’ total revenue depends on the elasticity of demand.…

A: Total revenue refers were total amount of money earned by the firm by selling of specific unit of…

Q: How can we increase the Total Revenue of products by using elasticity ? Explain shortly.

A: Total Revenue is the total amount income generated by sale of good or service. Total Revenue = Price…

Q: How can we increase the Total Revenue of products by using elasticity? Explain them by giving…

A: Total revenue is the price times quantity

Q: Suppose you are a business owner. Discuss how you would use various demand elasticities (own-price,…

A: In a market, a business owner has to deal with various market factors that cannot be controlled and…

Q: John owns the Latin Chocolate store. He charges $5 per pound for her hand made chocolate. You, the…

A: John is now the owner of Latin Chocolate store and charging $5/hand made chocolate. Having price…

Q: How is it possible for the elasticity of demand to change over time (in the long run)? Explain.

A: Price elasticity is the percentage change in the quantity demanded due to one percent change in…

Q: short-run or long-run industry supply that is perfectly elastic?

A: The ‘short run supply curve’ of a firm is the part of its ‘marginal cost(MC) curve’ that lies above…

Q: If you are a company that wants to maximize total revenue, what should you do if you have an elastic…

A: The objective of this question is to understand how a company can maximize its total revenue when…

Q: How can we increase the Total Revenue of products by using elasticity?

A: Elasticity measures the responsiveness of the quantity demanded of good to the change in price.

Q: How Does Elasticity Increase the Revenue in Small Businesses? Explain in detail .

A: The quantity demanded of a good is defined as the amount of the good the consumers of the good are…

Q: What is the relationship between price elasticity, revenue and marginal revenue?

A: Answer: Introduction: Price elasticity of demand: price elasticity of demand measures the percentage…

Q: The following graph refers to a situation wherein an oligopolistic firm faces a kinked demand curve.…

A: The firms in an oligopoly may collude to set prices or output levels, leading to reduced competition…

Question

As a producer, how would you use the information about elasticity to maximize your revenue? Explain.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1- Introduction

VIEW

Step 2- Explanation

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Suppose Erin, the owner-manager of a local hotel projects the following demand for her rooms: a. Calculate the price elasticity of demand between 90 and 110. b. Is the price elasticity of demand between 90 and 110 elastic, unit elastic, or inelastic? c. Will Erins total revenue rise if she increases the price from 90 to 110? d. Calculate the price elasticity of demand between 110 and 130. e. Is the price elasticity of demand between 110 and 130 elastic, unit elastic, or inelastic? f. Will Erins total revenue rise if she increases the price from 110 to 130?
If the midpoint on a straight-line demand curve is at a price of $7, what can we say about the elasticity of demand for a price change from $12 to $10? What about from $6 to $4?
Who would pay a tax imposed on the supplier when the price elasticity of supply is inelastic and the price elasticity of demand is elastic?
Along a segment of the demand curve where the price elasticity of demand is less than 1, a decrease in price a. is impossible. b. will increase total revenue. c. will decrease total revenue. d. decreases quantity demanded.
Price elasticity of demand tends to be larger in the long run than in the short run. Which of the following is a reason that this statement is true? a. Over time, peoples incomes rise. b. If price rises, over time, producers will be able to offer more substitutes. c. Over time, the good will become a smaller and smaller share of peoples budgets. d. People see fewer and fewer substitutes for the good in the long run.
Suppose that when price is 10, quantity supplied is 20 units, and when the price is 6, the quantity supplied is 12 units. What is the price elasticity of supply? a. 0.5 b. 0.8 c. 1.0 d. 1.5
Charles loves Mello Yello and will spend 10 per week on the product no matter what the price. What is his price elasticity of demand for Mello Yello?
If bus travel is an inferior good, its income elasticity of demand is a. strictly greater than 1. b. positive. c. equal to zero. d. negative.
Prove that price elasticity of demand is not the same as the slope of a demand curve.
As a producer, how would you use the information about elasticity to maximize your revenue? Explain. give graph if needed
If you are a company that wants to maximize total revenue, what should you do if you have an elastic product ?
How does the elasticity of a product impact Corporate Revenue? Why is it important for companies to understand this concept?