If the price minute of JAWWAL- Oreedo is ILS 0.65 , and ATPU (Average traffic per user) is 55 minutes. Suppose that JAWWAL made 30% discount on minute price during Ramadan: a) Calculate the price elasticity of demand on JAWWAL service, if ATPU rises to 85 minutes due to this offer, interpret your answer. b) Based on your answer in (a ) is the demand on JAWWAL service elastic, inelastic, or unit elastic. c) What do you advice Jawwal , is it profitable for JAWWAL to make the same offer gain, explain your answer.
If the price minute of JAWWAL- Oreedo is ILS 0.65 , and ATPU (Average traffic per user) is 55 minutes. Suppose that JAWWAL made 30% discount on minute price during Ramadan: a) Calculate the price elasticity of demand on JAWWAL service, if ATPU rises to 85 minutes due to this offer, interpret your answer. b) Based on your answer in (a ) is the demand on JAWWAL service elastic, inelastic, or unit elastic. c) What do you advice Jawwal , is it profitable for JAWWAL to make the same offer gain, explain your answer.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
If the
is 55 minutes. Suppose that JAWWAL made 30% discount on minute price during
Ramadan:
a) Calculate the price elasticity of demand on JAWWAL service, if ATPU rises to 85 minutes
due to this offer, interpret your answer.
b) Based on your answer in (a ) is the demand on JAWWAL service elastic, inelastic, or
unit elastic.
c) What do you advice Jawwal , is it profitable for JAWWAL to make the same offer gain,
explain your answer.
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