Economics: Private and Public Choice (MindTap Course List)
Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN: 9781305506725
Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher: Cengage Learning
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Chapter 20, Problem 13CQ

Suppose Erin, the owner-manager of a local hotel projects the following demand for her rooms:

Chapter 20, Problem 13CQ, Suppose Erin, the owner-manager of a local hotel projects the following demand for her rooms: a.

  1. a. Calculate the price elasticity of demand between $90 and $110.
  2. b. Is the price elasticity of demand between $90 and $110 elastic, unit elastic, or inelastic?
  3. c. Will Erin’s total revenue rise if she increases the price from $90 to $110?
  4. d. Calculate the price elasticity of demand between $110 and $130.
  5. e. Is the price elasticity of demand between $110 and $130 elastic, unit elastic, or inelastic?
  6. f. Will Erin’s total revenue rise if she increases the price from $110 to $130?
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