It is a rainy day in the village and we are selling Umbrellas. Here is the following data we have on demand. At a sale price of $10, demand is 130 Umbrellas. At a sale price of $12, demand is 110 Umbrellas. (a) Using the percentage method and $10 as your base value, what is the price elasticity of demand for Umbrellas? (b) At a price of $8, by how many dollars would revenue fall by? (c) Would it increase revenue to raise your price to $16? r

It is a rainy day in the village and we are selling Umbrellas. Here is the following data we have on demand. At a sale price of $10, demand is 130 Umbrellas. At a sale price of $12, demand is 110 Umbrellas. (a) Using the percentage method and $10 as your base value, what is the price elasticity of demand for Umbrellas? (b) At a price of $8, by how many dollars would revenue fall by? (c) Would it increase revenue to raise your price to $16? r

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

It is a rainy day in the village and we are selling Umbrellas. Here is the
following data we have on demand.
At a sale price of $10, demand is 130 Umbrellas.
At a sale price of $12, demand is 110 Umbrellas.
(a) Using the percentage method and $10 as your base value, what is the price
elasticity of demand for Umbrellas?
(b) At a price of $8, by how many dollars would revenue fall by?
(c) Would it increase revenue to raise your price to $16?
[

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