Three states have (separately) hired you as a consultant to advise them on their pricing of these license plates. They have given you the following information on the current prices (i.e., the extra fees) that they are charging and the estimated price elasticity of demand in each state for vanity plates at those prices: Price Elasticity State Colorado Illinois Price Charged $30 $60 Connecticut $50 Each state wants to maximize its revenue from the sale of the vanity plates. What general pricing advice (higher? lower? no change?) would you give to each state? Explain. -1.40 -0.80 -1.00

Three states have (separately) hired you as a consultant to advise them on their pricing of these license plates. They have given you the following information on the current prices (i.e., the extra fees) that they are charging and the estimated price elasticity of demand in each state for vanity plates at those prices: Price Elasticity State Colorado Illinois Price Charged $30 $60 Connecticut $50 Each state wants to maximize its revenue from the sale of the vanity plates. What general pricing advice (higher? lower? no change?) would you give to each state? Explain. -1.40 -0.80 -1.00

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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