Answered: Pricing in practice are influenced by…

Pricing in practice are influenced by the following, except a. customer demand b. competitor's action c. predatory pricing d. discretionary pricing

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter20: Elasticity: Demand And Supply

Section: Chapter Questions

Problem 11E: The price elasticity of the demand for gasoline is -0.02. The price elasticity of demand for...

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The Stopdecay Company sells an electric toothbrush for $25. Its sales have averaged 8,000 units per month over the past year. Recently, its closest competitor, Decayfigh ter, reduced the price of its electric toothbrush from $35 to $30. As a result, Stopde cays sales declined by 1,500 units per month. What is the arc cross elasticity of demand between Stopdecays toothbrush and Decayfighters toothbrush? What does this indicate about the relationship between the two products? If Stopdecay knows that the arc price elasticity of demand for its toothbrush is 1.5, what price would Stopdecay have to charge to sell the same number of units as it did before the Decayfighter price cut? Assume that Decayfighter holds the price of its toothbrush constant at $30. What is Stopdecays average monthly total revenue from the sale of electric toothbrushes before and after the price change determined in part (b)? Is the result in part (c) necessarily desirable? What other factors would have to be taken into consideration?
After running a promotional campaign, the owners of a local hardware store decided to decrease the prices for the advertised products sold in their store. One can infer that a. the promotional expenditures made the demand for the advertised products more elastic. b. the promotional expenditures made the demand for the advertised products less elastic. c. the promotional expenditures had no effect on the demand elasticity. d. the owners got it wrong. To cover the promotional expenses, they should have raised the prices.
The price elasticity of the demand for gasoline is -0.02. The price elasticity of demand for gasoline at Joe’s 66 station is -1.2. Explain what might account for the different elasticities.
Suppose Erin, the owner-manager of a local hotel projects the following demand for her rooms: a. Calculate the price elasticity of demand between 90 and 110. b. Is the price elasticity of demand between 90 and 110 elastic, unit elastic, or inelastic? c. Will Erins total revenue rise if she increases the price from 90 to 110? d. Calculate the price elasticity of demand between 110 and 130. e. Is the price elasticity of demand between 110 and 130 elastic, unit elastic, or inelastic? f. Will Erins total revenue rise if she increases the price from 110 to 130?
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Homework (Ch 05) The following graph shows the daily demand curve for bikes in Miami. Use the green rectangle (triangle symbols) to compute total revenue at various prices along the demand curve. Note: You will not be graded on any changes made to this graph. ? 300 275 250 225 200 175 150 A 125 100 75 50 25 77°F Sunny PRICE (Dollars per bike) B Demand a Total Revenue 21 St
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Suppose John, the owner-manager of a local hotel, projects the following demand for his rooms: Price ($) Quantity Purchased (per Night) Total Revenue 90 100 110 90 130 70 (a)Calculate the price elasticity of demand between $90 and $110. (Use the midpoint formula) (b)Is the price elasticity of demand between $90 and $110 elastic, unit elastic, or inelastic? (c)Will John’s total revenue rise if he increases the price from $90 to $110?…
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Price (dollars) 15 B 10 5 D 50 100 150 200 250 Quantity (units) In the figure above, using the midpoint method, what is the price elasticity of demand between points A and B? A) 2.33 B) 1.00 C) 0.43 D) 0.13 20