Question

A company has calculated their point price elasticity of demand to be -0.8 when they sell...

A company has calculated their point price elasticity of demand to be -0.8 when they sell 6,000 units a month at a price of $120 per unit.

What is the expected percentage change in the monthly quantity of units sold if the company raises the price by 30%? How many monthly units do they expect to sell after this change in price? Calculate price elasticity of demand at the new price and quantity.

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

expected percentage change in quality demanded is 24%

After this they expect to sell 4560 units.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
A company has calculated their point price elasticity of demand to be -0.8 when they sell...
A company has calculated their point price elasticity of demand to be -0.8 when they sell 6,000 units a month at a price of $120 per unit. The production manager informs the CEO of the company they just discovered a new and cheaper way to produce the good they sell. His advice is to double production because the new procedure halves the cost per unit, so costs will remain unchanged. Should the recommendation be followed? Relate your answer to the...
3. A company has calculated their point price elasticity of demand to be -0.8 when they...
3. A company has calculated their point price elasticity of demand to be -0.8 when they sell 6,000 units a month at a price of $120 per unit. (c) What should be the price in order to sell 7,200 units? (d) The production manager informs the CEO of the company they just discovered a new and cheaper way to produce the good they sell. His advice is to double production because the new procedure halves the cost per unit, so...
Cross-price elasticity of demand is calculated as the total percentage change in quantity demanded divided by...
Cross-price elasticity of demand is calculated as the total percentage change in quantity demanded divided by the total percentage change in price. percentage change in the price of good 1 divided by the percentage change in the price of good 2. percentage change in quantity demanded divided by the percentage change in income. percentage change in quantity demanded of good 1 divided by the percentage change in the price of good 2.
1.Price elasticity of demand is defined as: Multiple Choice a.the slope of the demand curve. b.the...
1.Price elasticity of demand is defined as: Multiple Choice a.the slope of the demand curve. b.the slope of the demand curve divided by the price. c.the percentage change in price divided by the percentage change in quantity demanded. d.the percentage change in quantity demanded divided by the percentage change in price. 2. The Midpoint Method for Elasticity uses which of the following? Multiple Choice a.Average percentage change in price only b.Average percentage change in quantity only c.Average percentage change in...
1.) Economists for McDonalds estimate that the price elasticity of demand for their french fries is...
1.) Economists for McDonalds estimate that the price elasticity of demand for their french fries is 0.8. So, if McDonalds raises the price of its french fries by 20 percent, the quantity demanded will decrease by ____ percent. 20 8 6 2.) Elasticity is likely to be highest for goods that: have many substitutes and are not necessary for basic living have few substitutes and are not necessary for basic living have few substitutes and are necessities 3.) If the...
Q8. Cross-price elasticity of demand is calculated as the A) percentage change in quantity demanded divided...
Q8. Cross-price elasticity of demand is calculated as the A) percentage change in quantity demanded divided by percentage change in price of a good. B) percentage change in quantity demanded of one good divided by percentage change in price of a different good. C) percentage change in quantity sold divided by percentage change in buyers' incomes. Q.9. If the cross-price elasticity of demand for computers and software is negative, this means the two goods are A) substitutes. B) complements. C)...
Elasticity Practice Problem Set We can gain insight by manipulating the price elasticity of demand equation....
Elasticity Practice Problem Set We can gain insight by manipulating the price elasticity of demand equation. With the information provided below, demonstrate what happens in the specific markets. Show all work. a) Suppose there is a technological change that allows manufacturers to make Android smartphones much more cheaply. In fact, the retail price falls by 15%, ceteris paribus. If the price of elasticity of demand is -0.8, how much does the quantity demanded change? b) In an alternative scenario, ceteris...
Calculating the price elasticity of demand: A step-by-stepguide Suppose that during the past year, the price...
Calculating the price elasticity of demand: A step-by-stepguide Suppose that during the past year, the price of a laptop computer rose from $2,950 to $3,110. During the same time period, consumer sales decreased from 468,000 to 296,000 laptops. Calculate the elasticity of demand between these two price–quantity combinations by using the following steps. After each step, complete the relevant part of the table with the appropriate answers. (Note: For decreases in price or quantity, enter values in the Change column...
1. If the price elasticity of demand for cigarettes is 0.55, and the price of cigarettes...
1. If the price elasticity of demand for cigarettes is 0.55, and the price of cigarettes increases by 10 percent, then the quantity of cigarettes demanded will fall by what percent? 2. If the price elasticity of demand for chicken is 2, then a 20% decrease in the price of chicken will lead to what percentage increase in the quantity demanded of chicken? 3. When the price of NBA tickets is $25 each, 30,000 tickets are sold. After the price...
Why, when we calculate the price elasticity of demand, do we express the change in price...
Why, when we calculate the price elasticity of demand, do we express the change in price as a percentage of the average price and the change in quantity as a percentage of the average quantity?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT