Help me please Peter's Pills is the only chemist in a small town. Peter's is located near the train station and gets a significant portion of its businessfrom travellers change train lines. The demand for toothpaste by local customers and travellers is given by the table below.QuantityDemandedQuantityPriceDemandedPer Unit|(Locals)(Travellers)$15$13$11$9$7$5$31234486167$132Peter's can buy toothpaste from a wholesale supplier for $2 per tube.The manager of Peter's has realised that the store can charge different prices to locals and travellers by offering a "locals discount" toanyone with an ID showing an address in the town. To maximise its profits, Peters should offer a discount (the difference the pricecharged to travellers and the price charged to locals) equal to $_Answer:

Price discrimination refers to the practice of charging different price from different consumers for…

Peter's Pills is the only chemist in a small town. Peter's is located near the train station and gets a significant portion of its busines from travellers change train lines. The demand for toothpaste by local customers and travellers is given by the table below. Quantity Demanded Quantity Demanded Price Per Unit (Locals) (Travellers) $15 $13 $11 $9 $7 $5 $3 2 3 4 4 8 16 7 $1 32 8 Peter's can buy toothpaste from a wholesale supplier for $2 per tube. The manager of Peter's has realised that the store can charge different prices to locals and travellers by offering a "locals discount anyone with an ID showing an address in the town. To maximise its profits, Peters should offer a discount (the difference the price charged to travellers and the price charged to locals) equal to $_ Answer:

Peter's Pills is the only chemist in a small town. Peter's is located near the train station and gets a significant portion of its busines from travellers change train lines. The demand for toothpaste by local customers and travellers is given by the table below. Quantity Demanded Quantity Demanded Price Per Unit (Locals) (Travellers) $15 $13 $11 $9 $7 $5 $3 2 3 4 4 8 16 7 $1 32 8 Peter's can buy toothpaste from a wholesale supplier for $2 per tube. The manager of Peter's has realised that the store can charge different prices to locals and travellers by offering a "locals discount anyone with an ID showing an address in the town. To maximise its profits, Peters should offer a discount (the difference the price charged to travellers and the price charged to locals) equal to $_ Answer:

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter6: Simple Pricing

Section: Chapter Questions

Problem 6.1IP

See similar textbooks

Similar questions

Time Income (Y) Quantity (Q) 2017 1500 35 2018 2000 25 Calculate income elasticity?
6. Elasticity and total revenue The following graph shows the daily demand curve for bikes in Chicago. 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. 120 110 Total Revenue 100 90 80 70 60 40 A 30 20 10 Demand 16 24 32 40 48 56 64 72 80 88 96 QUANTITY (Bikes) PRICE (Dollars per bike) 50
The figure below represents the weekly demand for GPS units. Price (dollars) 220 200- 180- 160 140 120 100- 80 60 40 20 0 Demand for GPS Units 40 80 120 160 200 240 280 320 360 400 440 Quantity (GPS units) < Prev ***Y 3 of 18 +++ www Next Maternit
What is the formula for calculating elasticity?
Given: Market for Flowers Price of Flower/boquet 100 Qd (x) of Flower/boquet 40 Fertilizer (f) for Flower/bag 70 Point Price of Candle Consumer (z) /piece 40 Income (I) (Time) A 10,000 15,000 20,000 330 32 60 90 C 500 20 70 110 1. Own price elasticity of demand (Pn) C A, 2. Income elasticity (ny) A-C; (inferior or normal good?) 3. Cross-price elasticity (nxz) B-C; (substitute or complementary?) 4. Input-price elasticity (nf) AB
Time Quantity Price 2017 120 20 2018 100 30 Calculate cross-price elasticity?
6. Elasticity and total revenue The following graph shows the daily demand curve for bikes in Denver. 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. 2 Total Revenue PRICE (Dollars per bike) 88NR S 89 88 89 O 300 275 18 27 35 45 54 53 72 QUANTITY (Bikes) 91 Demand 90 99 108
The price elasticity of demand for a product is estimated to be -2.3. At the initial price of $20, the quantity demanded was 10 units. If the firm increases theprice to $22.50, quantity demanded is expected tobyO A. decrease: 28.75%6O B. increase; 12.596O C. decrease: 18.75%O D. increase: 17.2596
Elasticity and Revenue ($) Price 9 87854 6 GRAPH P₁ 3 2 1 0 10 20 30 40 50 60 70 80 90 Quantity (per week) SETTINGS Demand More Inelastic Reset More Elastic ($) Expenditure 100 1 90 80 70 60 50 40 30 20 10 P₁ TR 0 10 20 30 40 50 60 70 80 90 DATA Quantity (per week) Demand: P = $6.00 - 0.100(Qd) Retu
Creative Homework/Short Project Assume that you arean entrepreneur who runs a bakery that sells glutenfree breads and cakes. You believe that the currenteconomic conditions merit an increase in the price ofyour baked goods. You are concerned. however, thatincreasing the price might not be profitable becauseyou are unsure of the price elasticity of demand for yourproducts. Develop a plan for the measurement of priceelasticity of demand for your products. What findingswould lead you to increase the price? What findingswould cause you to rethink the decision to increaseprices? Develop a presentation for your class outlining(I) the concept of elasticity of demand, (2) why raisingprices without undetstanding the elasticity would bea bad move. (3) your recommendations for measurement. and (4) the potential impact on profits for elasticand inelastic demand
You have data on Meena's quantity demanded for craft beer and theirincome. According to this data when Meena's income falls by 7% theassociated change in their quantity demanded for beer is 11%. You don'tknow if it is an increase or decrease in quantity demanded. From pastresearch you know that craft beer is a normal good for Meena. Use thisinformation to calculate Meena's income elasticity of demand.
5. Sam’s income band has been provided below for the past 5 years and he wants to understand about the elasticity of Income for the products he purchased. Year Income Product A Product B 2013 10,000 400 200 2014 12,000 500 300 2015 17,000 2100 1400 2016 17,500 2200 2200 2017 20,000 4,000 2400 1.Calculate the income elasticity for the year 2014,2015,2016 and 2017 for both the products A and B. Comment on what elasticity it is in each year