You work in the marketing department of a major telecommunications company. You discover that demand for phone calls during business hoursis inelastic, and demand for phone calls during evening hours is elastic. How could your company use this information to increase its totalrevenue? Fully explain your answer.

Demand for phone calls during business hours is inelastic. It means demand for phone calls during…

Answered: You work in the marketing department of…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Similar questions

Explain why the advertising elasticity of the market demand for beer may be less than the advertising elasticity of the demand for one particular brand.
a)Mike owns the Suprise Chocolate store. He charges $4 per kg for his hand made chocolate. You, the economist, have calculated the elasticity of demand for chocolate in her town to be 0.6. If he wants to increase his total revenue, what advice will you give him and why? Be able to explain your answer. b) A firm increases its price from $8 to $10 and sees demand for the product fall by 25%. What would the price elasticity
George has been selling 7,000 T-shirts per month for $7.00. When he increased the price to $9.00, he sold only 6,000 T-shirts. Which of the following best approximates the price elasticity of demand? -0.6769 -0.6154 -0.3077 -0.5538 Suppose George's marginal cost is $4 per shirt. Before the price change, George's initial price markup over marginal cost was approximately . George's desired markup is . Since George's initial markup, or actual margin, was than his desired margin, raising the price was
A dog rescue operation finds when it sets its adoption fee at $140 in a month, 200 dogs are adopted, but when they drop the price to $60, 300 dogs are adopted. What does that mean about the demand elasticity in their area? Question 4 options: The elasticity of demand is 0.5 and its relatively elastic The elasticity of demand is 0.5 and its relatively inelastic none of these answers are accurate The elasticity of demand is 2 and its relatively inelastic The elasticity of demand is 2 and its relatively elastic
Which of the following is most likely to have a low price elasticity of demand? A good that is very expensive. A good with no close substitutes. A good that most people consider a luxury. All are equally likely to have a low price elasticity of demand.
Melanie really enjoys using her old-school charcoal grill to cook steaks, but she has found that due to environmental regulations, charcoal prices have gone up 50%. What is her price elasticity of demand for the rest of this month going to be compared to what it will be in the spring? Please explain why.
John owns the Latin Chocolate store. He charges $5 per pound for her hand made chocolate. You, the economist, have calculated the elasticity of demand for chocolate in her town to be 0.8. If he wants to increase his total revenue, what advice will you give him and why? Be able to explain your answer.
Which of the following could be the price elasticity of demand for a good for which an increase in price would increase revenue?
Your company makes a product, Widgex, that has no direct substitutes, currently popular, and very price inelastic. Identify possible reasons that will keep you from raising its prices to very high levels.
Anna owns the Sweet Alps Chocolate store. She charges $500 per pound for her hand made chocolate. You, the economist, have calculated the elasticity of demand for chocolate in her town to be 2.5. If she wants to increase her total revenue, what advice will you give her and why? Explain your answer.
Describe the difference between an everyday low price strategy (EDLP) and a high/low price strategy
Suppose the Daily News estimates that if it raises the price of its newspaper from €1.00 to €1.50 then the number of subscribers will fall from 50,000 to 40,000. Answer the following questions What is the price elasticity of demand for the Daily Newspaper when elasticity is calculated using the midpoint method? Based on your answer, is the demand for the Daily Newspaper elastic or inelastic? If the Daily News's only concern is to maximize total revenue, should it raise the price of a newspaper from €1.00 to €1.50? Why or why not?

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