Willie's widgets currently sell for $10 each. At that price, Willie has sold 48,000 widgets. Willie would like to maximize his revenue, so he raises the price of a widget to $12 each. Willie has seen the sales of his widgets drop only slightly to 45,000. Using the initial-value method, the price elasticity of demand for Willie's widgets is absolute value rounded to two decimal places.) We can conclude that the demand for Willie's widgets under these conditions is O A. inelastic. B. unit elastic. O C. elastic. OD. perfectly inelastic. (Enter your response as an
Willie's widgets currently sell for $10 each. At that price, Willie has sold 48,000 widgets. Willie would like to maximize his revenue, so he raises the price of a widget to $12 each. Willie has seen the sales of his widgets drop only slightly to 45,000. Using the initial-value method, the price elasticity of demand for Willie's widgets is absolute value rounded to two decimal places.) We can conclude that the demand for Willie's widgets under these conditions is O A. inelastic. B. unit elastic. O C. elastic. OD. perfectly inelastic. (Enter your response as an
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
15
Transcribed Image Text:Willie's widgets currently sell for $10 each. At that price, Willie has sold 48,000 widgets. Willie would like to maximize
his revenue, so he raises the price of a widget to $12 each. Willie has seen the sales of his widgets drop only slightly to
45,000.
Using the initial-value method, the price elasticity of demand for Willie's widgets is
absolute value rounded to two decimal places.)
We can conclude that the demand for Willie's widgets under these conditions is
O A. inelastic.
B. unit elastic.
O C. elastic.
OD. perfectly inelastic.
(Enter your response as an
Expert Solution
Step 1
Demand curve is the downward sloping curve.
Elasticity measures the percentage change in quantity due to percentage change in price.
The demand is said to be Elastic when the absolute value of elasticity is greater than 1.
The demand is said to be inelastic when the absolute value of elasticity is less than 1.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
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