Your Graph Score: 100% ed 140 Price 130 120 110 100 90 80- 70 The Market S 60- 50 40- 30 20 D 10 0 0 60 120 180 240 300 360 420 Quantity b) At the price of $130, the market will experience excess supply in the amount of 300 units. c) At the price of $20, the market will experience excess demand in the amount of 60 units.

Your Graph Score: 100% ed 140 Price 130 120 110 100 90 80- 70 The Market S 60- 50 40- 30 20 D 10 0 0 60 120 180 240 300 360 420 Quantity b) At the price of $130, the market will experience excess supply in the amount of 300 units. c) At the price of $20, the market will experience excess demand in the amount of 60 units.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter3: Demand Analysis

Section: Chapter Questions

Problem 8E: The Stopdecay Company sells an electric toothbrush for $25. Its sales have averaged 8,000 units per...

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The Stopdecay Company sells an electric toothbrush for $25. Its sales have averaged 8,000 units per month over the past year. Recently, its closest competitor, Decayfigh ter, reduced the price of its electric toothbrush from $35 to $30. As a result, Stopde cays sales declined by 1,500 units per month. What is the arc cross elasticity of demand between Stopdecays toothbrush and Decayfighters toothbrush? What does this indicate about the relationship between the two products? If Stopdecay knows that the arc price elasticity of demand for its toothbrush is 1.5, what price would Stopdecay have to charge to sell the same number of units as it did before the Decayfighter price cut? Assume that Decayfighter holds the price of its toothbrush constant at $30. What is Stopdecays average monthly total revenue from the sale of electric toothbrushes before and after the price change determined in part (b)? Is the result in part (c) necessarily desirable? What other factors would have to be taken into consideration?
Suppose you could buy shoes one at a time, miter than in pain. What do you predict the cross-price elasticity for left shoes and right shoes would be?
What does a price elasticity of demand of 0.39 mean?
(Determinants of Price Elasticity) Would the price elasticity of demand for electricity be more elastic over a shorter or a longer period of time?
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