Parts (a), (b), and (c) all were assumed to occur before Apple improved the quality of Airpods. Do you think the quality improvements would make the demand for Airpods more elastic or inelastic? Explain your reasoning.

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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Apple is squeezing more value out of its year-old Airpods pro by introducing new features in a software update. We put them to the test. With new software  updates, Apple is squeezing more value out of its yearold airpods pro, The company noise-canceling wireless earbuds.

Apple has invested resources into improving the quality of its AirPods.

(part a) Suppose the marginal costs of producing AirPods are $100. Before the quality improvements, the price was $160. Calculate the current margin.

(part b) Using the price and marginal cost from part (a), assume that Apple's simple pricing strategy had achieved profit maximization. If this is true, what would be the value of desired margin?

 

(part c) Using the same information from parts (a) and (b), what would be the value of the price elasticity of demand? Interpret this value in words.

 

(part d) Parts (a), (b), and (c) all were assumed to occur before Apple improved the quality of Airpods. Do you think the quality improvements would make the demand for Airpods more elastic or inelastic? Explain your reasoning.

anwer only part d

thanku

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