There are three sets of price and quantity below for a firm. P1 = $40 Q1 = 20 P2 = $30 Q2 = 40 P1 = 30 Q1 = 40 P2= 25 Q2 = 50 P1 = 25 Q1 = 50 P2 = 20 Q2 = 60 Given the information above on the four sets of price and quantity 1. Using the price elasticity of demand (PED) formula (using the average formula), calculate the PED for each set of price and quantity demanded change, and determine in absolute value the range of elasticity? 2. Using the information of above, calculate the total revenue (TR) for each and given the information from parts a, b and c, predict the price this firm will charge?
There are three sets of price and quantity below for a firm. P1 = $40 Q1 = 20 P2 = $30 Q2 = 40 P1 = 30 Q1 = 40 P2= 25 Q2 = 50 P1 = 25 Q1 = 50 P2 = 20 Q2 = 60 Given the information above on the four sets of price and quantity 1. Using the price elasticity of demand (PED) formula (using the average formula), calculate the PED for each set of price and quantity demanded change, and determine in absolute value the range of elasticity? 2. Using the information of above, calculate the total revenue (TR) for each and given the information from parts a, b and c, predict the price this firm will charge?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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There are three sets of price and quantity below for a firm.
P1 = $40 Q1 = 20
P2 = $30 Q2 = 40
P1 = $40 Q1 = 20
P2 = $30 Q2 = 40
P1 = 30 Q1 = 40
P2= 25 Q2 = 50
P1 = 25 Q1 = 50
P2 = 20 Q2 = 60
Given the information above on the four sets of price and quantity
1. Using the price elasticity of demand (PED ) formula (using the average formula),
calculate the PED for each set of price and quantity demanded change, and determine in
absolute value the range of elasticity?
calculate the PED for each set of price and quantity demanded change, and determine in
absolute value the range of elasticity?
2. Using the information of above, calculate the total revenue (TR) for each and given the
information from parts a, b and c, predict the price this firm will charge?
information from parts a, b and c, predict the price this firm will charge?
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