In recent years, technology has greatly improved our listening experience through better earphones and headphones. Some of the popular brands offering headphones with the latest technology are Suny and Base. Answer the following questions: a. A new company called Company X is planning to enter the market for headphones. Their headphones use the latest technologies and are able to rival many existing popular brands. There are many positive reviews for Company X and it is believed that their arrival will provide consumers more options when choosing a headphone. The arrival of Company X's headphones will probably result in the demand for existing headphones to be more Type I for Inelastic, E for Elastic or N for No changes. b. Company X is experimenting to decide the best price to sell their newest headphones. In a surveyed market, it is estimated that 685 headphones can be sold in a day if it is sold at a price of $366. If prices drop to $312, more headphones can be sold and it is estimated that 846 headphones will be sold. What is the estimated price elasticity of demand using the mid-point formula? (give an absolute value i.e. a positive value) Answer to the nearest two decimal places. c. Assume that Company X is trying to maximise revenue. Considering your answer in part b), should Company X increase the price Type Y for Yes, N for No or U for Unknown. for this headphone in hopes to increase revenue?
In recent years, technology has greatly improved our listening experience through better earphones and headphones. Some of the popular brands offering headphones with the latest technology are Suny and Base. Answer the following questions: a. A new company called Company X is planning to enter the market for headphones. Their headphones use the latest technologies and are able to rival many existing popular brands. There are many positive reviews for Company X and it is believed that their arrival will provide consumers more options when choosing a headphone. The arrival of Company X's headphones will probably result in the demand for existing headphones to be more Type I for Inelastic, E for Elastic or N for No changes. b. Company X is experimenting to decide the best price to sell their newest headphones. In a surveyed market, it is estimated that 685 headphones can be sold in a day if it is sold at a price of $366. If prices drop to $312, more headphones can be sold and it is estimated that 846 headphones will be sold. What is the estimated price elasticity of demand using the mid-point formula? (give an absolute value i.e. a positive value) Answer to the nearest two decimal places. c. Assume that Company X is trying to maximise revenue. Considering your answer in part b), should Company X increase the price Type Y for Yes, N for No or U for Unknown. for this headphone in hopes to increase revenue?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Transcribed Image Text:QUESTION 5
In recent years, technology has greatly improved our listening experience through better earphones and headphones. Some of the popular
brands offering headphones with the latest technology are Suny and Base.
Answer the following questions:
a. A new company called Company X is planning to enter the market for headphones. Their headphones use the latest technologies
and are able to rival many existing popular brands. There are many positive reviews for Company X and it is believed that their
arrival will provide consumers more options when choosing a headphone. The arrival of Company X's headphones will probably
result in the demand for existing headphones to be more
Type I for Inelastic, E for Elastic or N for No
changes.
b. Company X is experimenting to decide the best price to sell their newest headphones. In a surveyed market, it is estimated that 685
headphones can be sold in a day if it is sold at a price of $366. If prices drop to $312, more headphones can be sold and it is
estimated that 846 headphones will be sold. What is the estimated price elasticity of demand using the mid-point formula? (give an
absolute value i.e. a positive value)
Answer to the nearest two decimal places.
c. Assume that Company X is trying to maximise revenue. Considering your answer in part b), should Company X increase the price
Type Y for Yes, N for No or U for Unknown.
for this headphone in hopes to increase revenue?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 4 steps
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.Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education