Question

1. when decreasing the price of diapers from $10 to $8 dollars total revenue Increases. demand price is inelastic, unit elastic or elastic?

2. when decreasing the price of diapers from $4 to $3 total revenue Decrease demand price is unit elastic, inelastic, or elastic?

3. The business would want to know the profit maximizing price at this price, demand price is inelastic, unit elastic or elastic?

Answer #1

a) While decreasing the price of the good the revenue has increased that tells us that the demand for the good was elastic. Only for the elastic good the revenue will increase after the decrease in the price.

b) If the total revenue decreased after an increase in the demand then we can say that the demand for the goof was inelastic.

c) For profit maximizing the business will sell the good at a point where the Marginal revenue and the marginal cost are same .the demand at this price will always be elastic.

How is total revenue increased when demand is elastic?
If an increase in price causes an increase in total
revenue, demand is said to be inelastic
and if an increase in price causes a decrease in total
revenue, then demand is said to be
elastic… There’s no way for total revenue to
increase when demand is elastic, right?

When Vincent’s Produce increases the price of strawberries from
$4.75/pound to $5.25/pound, he finds that sales drop from 330
pounds/week to 310 pounds/week.
Calculate the price elasticity of demand for Vincent’s
strawberries.
Is demand elastic, inelastic or unit elastic?
Did Vincent’s revenue from strawberry sales increase, decrease
or stay the same?
Med rents surfboards on the big island of Hawaii. He’s been
charging $10/hour and averages 32 rentals an hour. When he lowered
the rate to $9.50/hour the average hourly...

1. If the price decreases by 4 percent. As a result, the
quantity demanded increases by 12 percent. The price elasticity of
demand is………...
2. What is the relationship between elasticity and revenue?
3. A 7 percent reduction in the price of a product has zero
effect on the dollar amount of consumer expenditure on the product.
The price elasticity of demand is………
4. What does the price elasticity of demand coefficient
measures?
5. What is characteristic of the demand...

a. How much would the firm’s revenue change if it lowered price
from $12 to $10? Is demand elastic or inelastic in this range?
Revenue change: $ -3.66 -3.66 Incorrect Demand is elastic Correct
in this range b. How much would the firm’s revenue change if it
lowered price from $4 to $2? Is demand elastic or inelastic in this
range? Revenue change: $ 20 20 Incorrect Demand is inelastic
Correct in this range c. What price maximizes the firm’s...

When demand is own price-inelastic, a price
decrease ______________________ total revenue.

A local golf club receives total revenue of $10,000 per month
when it charges $10 per person, and $12,000 in total revenue when
it charges $12 per person. Over that range of prices, the business
faces:
Question 3 options:
Inelastic demand
Unitary elastic demand
Elastic demand
Perfectly elastic demand
Perfectly inelastic demand

When a monopolist faces a downward sloping linear demand curve
for its product, total revenue is maximized when the monopolist
produces on the midpoint of the demand curve (unit elastic point).
Under what conditions, if ever, would a profit maximizing,
single-price monopolist choose to produce at this point of the
demand curve?

The demand for a particular commodity when sold at a price of p
dollars is given by the function D(p) = 4000e −0.02p .
(a) Find the price elasticity of demand function and determine
the values of p for which the demand is elastic, inelastic, and of
unitary elasticity.
(b) If the price is increased by 3% from $12, what is the
approximate effect on demand?
(c) Find the revenue R(p) obtained by selling q units at p
dollars per...

8.
When the price increases by 30 percent and the quantity demanded
drops by 30 percent, the price elasticity of demand is
unitary elastic.
elastic.
perfectly inelastic.
inelastic.
perfectly inelastic.
9.
If the cross-price elasticity of demand between Good A and Good
B is 2 and the percentage change in price of Good A is 5 percent,
what is the percentage change in quantity demanded of Good B?
-3 percent
1.50 percent
10 percent
3 percent
-1.25 percent

Is
the law of demand violated when price increases and total revenue
increases also?

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