MICROECONOMICS-ACCESS CARD <CUSTOM>
11th Edition
ISBN: 9781266285097
Author: Colander
Publisher: MCG CUSTOM
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Textbook Question
Chapter 6, Problem 10QE
A newspaper recently lowered its
- a. What was the newspaper’s
elasticity of demand ? - b. Given that elasticity, did it make sense for the newspaper to lower its price?
- c. What would your answer be if much of the firm’s revenue came from advertising and the higher the circulation, the more it could charge for advertising?
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Suppose that the Blinn College Deli is currently selling 500 chef salads per day when the price is $5. Suppose that the own-price elasticity of
demand for chef salads is -0.8. As the Deli manager you decide to lower the price by $0.50. Which of the following is most likely to happen?
Chef salad sales will fall by approximately 8% and total revenue will be lower.
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Chef salad sales will fall by approximately 8% and total revenue will be higher.
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QUESTION 4.6
Your summer internship is with the strategy department of Chevy Chase Bank (CCB).
They are considering changing the fee they charge to non-customers who use their automated teller
machines (ATMs). CCB customers can use CCB ATMs without a fee. CCB conducted some
market research and have found that when they raise their ATM fee, they actually increase the
number of new checking account customers per day-the cross-price elasticity is positive. Non-
customers get tired of paying the fee so they become customers. However, as you raise ATM fees
you lose non-customer transactions at your ATMs. The non-customer demand for CCB ATM
transactions is given by the equation Q = 19,000 - 6,000P. Right now CCB handles 10,000 non-
customer ATM transactions per day at a fee of $1.50.
a. What is the own-price elasticity for ATM fees charged to non-customers? N At the current
ATM fee, should you raise or lower your ATM fees? Why?
b. What should your new ATM fee be if your marginal cost of…
Chapter 6 Solutions
MICROECONOMICS-ACCESS CARD <CUSTOM>
Ch. 6.1 - If when price rises by 4 percent, quantity...Ch. 6.1 - Prob. 2QCh. 6.1 - Prob. 3QCh. 6.1 - Prob. 4QCh. 6.1 - Prob. 5QCh. 6.1 - Prob. 6QCh. 6.1 - Prob. 7QCh. 6.1 - Prob. 8QCh. 6.1 - Prob. 9QCh. 6.1 - Prob. 10Q
Ch. 6 - Determine the price elasticity of demand if, in...Ch. 6 - A firm has just increased its price by 5 percent...Ch. 6 - When tolls on the Dulles Airport Greenway were...Ch. 6 - Prob. 4QECh. 6 - Prob. 5QECh. 6 - Prob. 6QECh. 6 - Prob. 7QECh. 6 - Economists have estimated the following...Ch. 6 - Prob. 9QECh. 6 - A newspaper recently lowered its price from 5.00...Ch. 6 - Once a book has been written, would an author...Ch. 6 - Prob. 12QECh. 6 - Prob. 13QECh. 6 - Suppose average movie ticket prices are 8.50 and...Ch. 6 - Which of the following producers would you expect...Ch. 6 - Prob. 16QECh. 6 - Prob. 17QECh. 6 - Prob. 18QECh. 6 - Prob. 19QECh. 6 - Prob. 20QECh. 6 - Prob. 21QECh. 6 - Prob. 22QECh. 6 - Prob. 1QAPCh. 6 - Prob. 2QAPCh. 6 - Prob. 3QAPCh. 6 - Prob. 4QAPCh. 6 - Prob. 5QAPCh. 6 - Price elasticity is not just a technical economic...Ch. 6 - Prob. 1IPCh. 6 - Prob. 2IPCh. 6 - Prob. 3IPCh. 6 - Prob. 4IPCh. 6 - Prob. 5IPCh. 6 - In 2004, Congress allocated over 20 billion to...Ch. 6 - In 2004, (Congress allocated over 20 billion to...Ch. 6 - Prob. 8IPCh. 6 - Prob. 9IPCh. 6 - Prob. 10IP
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