SUBJECT: MANAGERIAL ECONOMICSCOURSE CODE: BEC 101I'VE ALREADY ANSWER NUMBER 1, PLEASE HELP ME IN NUMBER 6 PRICE ELASTICITYOF DEMAND:APPLICATION FOR BUSINESS STRATEGY TO MAXIMIZE TOTAL REVENUEGIVEN: The following hypothetical data concerning PRICE "P" and QUANTITYdemand (Qd) and Points "A" to "I" along the Demand Line that represent variouscombinations of "P" and "Qd", respectively.POINTPRICEQUANTITY DEMANDED(Pt)(P)(Qd)A80ВC706010020050300404003020500600G10700800REQUIREMENTS:1. Using Microsoft EXCEL, plot the above data set on a graph so that you canshow the geometric interpretation with appropriate calibration on the verticalsand horizontal axis for PRICE and QUANTITY, respectively.9080A70B60 6. Discuss the implication or application of Price Elasticity to the formulation ofBUSINESS STRATEGY to MAXIMIZE TOTAL REVENUE.*******k**

The sellers, or firms in the market operate in the markets with the motive of earning highest…

Answered: 6. Discuss the implication or…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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5. After expanding expenditures on its 'blind taste test' ad campaign from $10 million to $15 million per month, 7up Inc. observes that sales quantity last month fell from 120 million bottles to 110 million bottles. a. What is the advertising elasticity of demand? MA = b. What can you say from this elasticity about their current advertising campaign?
1 Consider a firm that estimates that its price elasticity of demand equals -1.5. Price equals $36 and the marginal cost of production equals $12. Is this firm maximizing profit? Explain. If not, should the firm increase or decrease its price?
6. Elasticity and total revenue The following graph illustrates the weekly demand curve for motorized scooters in Madison. Use the green rectangle (triangle symbols) to compute total revenue at various prices along the demand curve. Note: You will not be graded on any changes made to this graph. PRICE (Dollars per scooter) 325 300 275 250 225 200 175 150 125 100 75 50 25 0 0 10 20 30 40 50 A * 60 B 70 80 Demand 90 100 110 120 130 Total Revenue ?
3. The table below contains information regarding price and output for a firm. For each point except the first, calculate the elasticity between it and the point above. Price ($) Quantity 7 6 5 4 3 2 1 10 20 30 40 50 60 70 Elasticity
4. In an attempt to increase revenues and profits, a firm is considering a 5 percent increase in price and an 10 percent increase in advertising. If the price elasticity of demand is -1.5 and the advertising elasticity of demand is +0.6, would you expect an increase or decrease in total revenues? 4
5. Elasticity and total revenue 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 Total Revenue 225 200 A 175 150 125 100 75 50 25 Demand 10 15 20 25 30 35 40 45 50 55 60 QUANTITY (Bikes) On the folowing graph, use the green point (triangle symbol) to plot the annual total revenue when the market price is $50, $75, $100, $125, $150, $175, and $200 per bike. 5300 4500 Total Revenue 4500 400 W 3700 3300 2900 2500 2100 1700 25 50 75 100 125 150 175 200 225 250 275 300 PRICE (Dollars per bike) According to the midpoint method, the price elasticity of demand between points A and B is approximately Suppose the price of bikes is currently $100 per bike, shown as point B on the initial graph. Because the demand between points A and B is va $25-per-bike increase in price will lead to v in…
Snooki, a new marketing intern, was a little scatterbrained during the first meeting with her manager, when she made four statements about pricing. Which one of her four statements about pricing was correct? a. A product with an elastic demand is likely to face little competition. b. An EDLP retailer offers many price promotions. c. A product with an elasticity of demand of -0.7 will enjoy increases in revenue when prices are cut. d. Cost-plus pricing is not the perfect pricing strategy because the pricing method ignores customers’ willingness to pay and competitors’ pricing strategy.
17. How might advertising lead to a shift in the demand curve? By increasing the popularity of inferior goods By increasing awareness and changing the elasticity of demand By causing demand to become much more elastic By allowing the law of demand and law of supply to reach the market equilibrium
6. Elasticity and total revenue The following graph illustrates the weekly demand curve for motorized scooters in Moline. 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. PRICE (Dollars per scooter) 130 120 TOTAL REVENUE (Dollars) 110 100 90 80 + 70 60 50 40 30 20 10 0 2480 2240 2000 1760 1520 On the following graph, use the green point (triangle symbol) to plot the weekly total revenue when the market price is $20, $30, $40, $50, $60, $70, and $80 per scooter. 1280 1040 800 560 A + 0 320 B 10 20 30 + 0 10 20 Demand ++ 40 50 60 70 80 90 100 110 120 130 QUANTITY (Scooters) Total Revenue 30 40 50 60 70 80 90 100 110 120 130 PRICE (Dollars per scooter) Total Revenue (?) (?) According to the midpoint method, the price elasticity of demand between points A and B is approximately Suppose the price of scooters is currently $80 per scooter, shown as point A on the…
5. The variation in elasticity and total revenue along a demand curve The following graph shows the daily demand curve for bippitybops in San Diego. 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. PRICE (Dollars per bippitybop) 100 8 90 80 288 70 60 50 40 30 20 10 0 0 6 + D * B Demand 48 12 18 24 30 36 42 QUANTITY (Bippitybops per day) 54 60 Total Revenue ?
6. Elasticity and total revenue I The following graph shows the daily demand curve for bippitybops in Halifax. Use the green rectangle (triangle symbols) to compute total revenue at various prices along the demand curve. Note: You will not be scored on any changes made to this graph. 300 275 250 Total Revenue 225 200 175 + 150 125 100 75 50 25 Demand 3 6. 12 15 18 21 24 27 30 33 36 QUANTITY (Bippitybops per day) PRICE (Dollars per bippitybop)
6. Elasticity and total revenue The following graph shows the daily demand curve for bikes in San Diego. 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. 10600 2 1000 9000 8200 7400 6000 5000 5000 4200 300 3400 275 250 225 200 175 150 On the following graph, use the green point (triangle symbol) to plot the annual total revenue when the market price is $50, $75, $100, $125, $150, $175, and $200 per bike. 125 100 75 50 25 0 4 B Demand 0 10 20 30 40 50 60 70 80 90 100 110 120 QUANTITY (Bikes) T▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬ 0 25 50 75 100 125 150 175 200 225 250 275 300 PRICE (Dolars per bike) A Total Revenue Total Revenue (?) According to the midpoint method, the price elasticity of demand between points A and B is approximately

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6. Discuss the implication or application of Price Elasticity to the formulation of BUSINESS STRATEGY to MAXIMIZE TOTAL REVENUE.