Managerial Economics: A Problem Solving Approach
5th Edition
ISBN: 9781337106665
Author: Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher: Cengage Learning
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Chapter 14, Problem 9MC
To determine
The
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Question 1 Danny “Dimes” Donahue is a neighborhood’s 9-year-old entrepreneur. His most recent venture is selling homemade brownies that he bakes himself. At a price of $1.5 each, he sells 250. At a price of $1 each, he sells 300.
Instructions: Use the midpoint method and round your answer to 2 decimal places. Do not include a minus sign.
a. What is the elasticity of demand?
Question 2
Linda sells 100 bottles of homemade ketchup for $10 each. The cost of the ingredients, the bottles, and the labels was $700. In addition, it took her 20 hours to make the ketchup and to do so she took time off from a job that paid her $20 per hour.
Instructions: Enter your answers as whole numbers.
Linda's accounting profit is:
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Question 3 Gomez runs a small pottery firm. He hires one helper at $11,500 per year, pays annual rent of $7,000 for his shop, and spends $22,500 per year on materials. He has $40,000 of his own funds invested in equipment (pottery wheels, kilns, and…
1. The sylvan corporation has estimated the pice elasticity of demand for synthetic wood sorrel to be -0.25.
a. If the price of sylvan's wood sorrel increases by 10% what will happen to the quantity demanded of wood hewers.
b. What will happen to sylvan revenue as a result of price increase?
Due to the COVID-19, the price of hand-sanitizer increases from 150 taka to 250 taka. In response, the quantity demanded declines from 20 units to 15 units.(a) Calculate the price elasticity of demand.
(b) Explain if the demand is elastic or inelastic. Based on the elasticity, what change (increase, decrease, or keep it the same) in price the seller can do to maximize his total revenue? Explain your answer.
Please answer Step by step. Answer must be correct.Do all calculation step by step.Don,t copy from any where. Must answer follow question.
Chapter 14 Solutions
Managerial Economics: A Problem Solving Approach
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