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: Cengage Learning
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Chapter 14, Problem 2E
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Suppose your elasticity of demand for your parking lot spaces is –2, and price is $8/day. If your MC is zero, and your capacity is 80% full at 9 A.M. over the last month, are you optimizing?
Suppose your elasticity of demand for your parking lot spaces is –2, and price is $8 per day. If your MC is zero, and your lot is 80% full at 9 A.M. over the last month, are you optimizing?
Suppose the demand for a product is given by D(p)=-8p+227.
A) Calculate the elasticity of demand at a price of $18.
Elasticity =
(Round to three decimal places.)
B) At what price do you have unit elasticity? (Round your answer to the nearest penny.)
Price = $
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Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
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- An attractive feature of new cell phones that was introduced in recent years is that you can switch carriers easily with the same device. How does this feature affect demand for wireless phone services? What are the likely effects on the demand that a particular US carrier is facing? Are there any elasticities that were likely to be affected?arrow_forwardAn end-of-aisle price promotion changes the price elasticity of a good from -2 to -3 . Suppose the normal price is$26, revenue with marginal cost at the initial elasticity of -2 . What should the promotional price be when the elasticity changes to -3 ? (Hint: In other words, what price will equatemcost?)$11.70 $15,60 $13.6 $19.50arrow_forwardSuppose the demand for a product is given by D(p) = -2p+ 232. A) Calculate the elasticity of demand at a price of $59. Elasticity = (Round to three decimal places.) B) At what price do you have unit elasticity? (Round your answer to the nearest penny.) Price = $arrow_forward
- the demand function for Netflixis ()(pD), where (p) is the price in dollars. For their “Basic” plan, Netflixcurrently charges ($9)per month, and it plans to raise the price to increase revenues:arrow_forwardAn end-of-aisle price promotion changes the price elasticity of a good from -2 to -3. Suppose the normal price is $34 , which equates marginal revenue with marginal cost at the initial elasticity of -2. What should the promotional price be when the elasticity changes to -3 ? ( Hint : In other words, what price will equate marginal revenue and marginal cost?) a) $ 30.60 b) $25.50 c) $33.15 d)$ 35.70arrow_forward4x + 500 10x +9 the number of plants sold per day when the price is x dollars per plant. A garden shop determines the demand function q = D(x) = (a) Find the elasticity. (b) Find the elasticity when x=3. (c) At $3 per plant, will a small increase in price cause the total revenue to increase or decrease? (a) The elasticity is during early summer for tomato plants where q is M Irarrow_forward
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