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- Explain the term price elasticity of demand?How is it measured?If the price elasticity is -3 and RM 200 is the marginal cost of product x,what should be the optimal sale prince?(hint:apply the mark-up rule)George has been selling 5,000 T-shirts per month for $8.50. When he increased the price to $9.50, he sold only 4,000 T-shirts. What is the demand elasticity? If his marginal cost is $4 per shirt, what is his desired markup and what is his initial actual markup? Was raising the price profitable?The Dixie Chicken currently sells 3,000 burger platters per month for $8, and the own-price elasticity for this platter has been estimated to be -1.25. If Dixie Chicken raises prices by 75cents, how many platters will be sold? Round to the nearest whole number.
- If the short-term own price elasticity for a product is estimated to be -0.6, then long-term own price elasticity is expected to be?The manager of the Sell-Rite drug store accidentally mismarked a shipment of 20- pound bags of charcoal at $3.15 instead of the regular price of $4.25. In a week, a total of 180 bags of charcoal was sold. The store normally sells an average of 120 bags per week. What is the store’s arc elasticity of demand for charcoal? Also make an economic interpretation of the elasticity figure.2. At the price of $15, Zeke were able to sell 7,000 ball pens. When he increased the price by $10, he sold only 5,000 pens. What is the demand elasticity? If his marginal cost is $3 per pen, what is his desired markup and what is his initial actual markup? Was raising the price profitable?
- Lara offers 100 autograph bats. If each is priced at p dollars, it is that the demand curvefor the bast will be p = 250 − q 4 If price elasticity is E(p) =dq ÷ dp q p When |E(p)| < 1, demand is inelastic and when |E(p)| > 1, demand is elastic. (i) Find the price elasticity of demand for Lara′s bats. (ii) Is demand inelastic or elastic?How can price elasticity of demand be important to: -(i) a government, (ii) managers of hypermarkets ‘suppose a pharmaceutical company considers increasing the price of insulin tm $125 per vial to $300 per vial. whenthe price was $125, the company sold 100, 000 vials per day. the company knows its price elasticity is .25. calculate thepercentage change in quantity demanded that would result in a price elasticity of .25. show your work
- if the price of a product increases from R5 to R7 and the quantitality demanded decreases from 3000 to 1000 units, the price elasticity demanded will be a. 0.9 b. 2.2 c. 1.67 d. 0.5Joe's Pig Palace sells barbecue plates for $4.50 each, and serves an average of 525 customers per week. During a recent promotion, Joe cut his price to $3.50 and observed an increase in sales to 600 plates per week. a. Calculate Joe's arc price elasticity of demand. b. Joe is considering permanently lowering his price to $4.00 to increase revenue. How many plates should Joe expect to sell at the new price? Does the move make sense in the light of Joe's desire to increase revenue?why do you think brand-named goods are more elastic or less elastic than categories, especially when there are very good substitutes for Exxon gasoline available at close distances?