Managerial Economics And Business Strategy 9th Edition (without Access Code)
Managerial Economics And Business Strategy 9th Edition (without Access Code)
9th Edition
ISBN: 9781260263176
Author: Michael R. Baye, Jeffrey T. Prince
Publisher: McGraw Hill
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Chapter 3, Problem 2CACQ

The demand curve for a product is given by Q x d = 1 , 200 3 P x 0.1 P z where P z = $ 300 .

  1. What as the own price elasticity of demand when P x = $ 140 ? Is demand elastic or inelastic at s price? What would happen to the firms revenue if it decided to charge a price below $140?
  2. What is the own price elasticity of demand when P x = $ 240 ? Is demand elastic or inelastic at s price? What would happen to the firms revenue if it decided to charge a price above $240?
  3. What is the cross-price elasticity of demand between good X and good Z when P x = $ 140 ? Are goods X and Z substitutes or complements?

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