Use the demand curve below to answer questions 1 through 6. 12- 10- 81 2- 50 100 150 200 250 quantity At what quantity is total revenue maximized? price
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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 StQUESTION 14 Explain the concept of supplier-induced demand (SID). What is it? For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). BIUS Paragraph Arial 14pxMicroEconomics Practice: Eric has a taco stand in downtown San Francisco. He wants to increase his total revenue. He knows that, when tacos are $1.00, he sells 20 an hour, and when he lowers the price to $0.75, he sells 25 an hour. (a) Calculate the price elasticity of demand for Jose's hotdogs using the midpoint formula. (show the formula and your calculations) (b) Is demand elastic or inelastic? How do you know? Explain your answer. (c) Using the price elasticity of demand calculated in section A, explain whether Eric should raise or lower the price to generate more revenue.
- You are the marketing manager of a farm. How will you transform itsprice elastic products, such as carrots and potatoes, into price inelasticproducts in order to gain more profit margins?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.Points Price Qty Demanded A 50 150 B 45 200 C 40 250 D 35 300 E 30 350 F 25 400 G 20 450 H 15 500 I 10 550 Please add a fourth column for Total revenue and a fifth column for Price Elasticity of Demand The income of Mr. De la Cruz increased from P300 to P450 a day. His demand for grocery items increased from 200 to 500. Compute for his income elasticity of demand. The price of product A increased from P20 to P40. The demand for Product B went up from 100 to 200. Calculate the cross elasticity of demand.
- Demand for a product is price inelastic. What effect will a rise in price have on demand and total revenue? Pick a, b, c, or d6. 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 108The demand schedule of the product is given below Price $ (P) Quantity (Q) 100 1 90 2 80 3 70 4 60 5 50 6 40 7 30 8 20 9 10 10 Calculate the arc price elasticity as the price decrease from 40 to 30$ and interpret the result. What are the determinants of price elasticity of demand?
- 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 workGood or Service Price Elasticity Income Elasticity Beef -0.5 0.51 Long Distance Telephone -0.32 1.2 Cigarettes All smokers -0.7 0.9 Ages 15-18 -1.4 1.5 What will happen to sales for long-distance telephone if its price increases by 5% and income increases by 8%? Select one: a. Sales will decrease by 5%. b. Sales will increase by 5%. c. Sales will decrease by 8%. d. Sales will increase by 8%.A challenge when determining price-demand relationship, one must consider __________________, such as the changes in the economic conditions or other marketing mix elements.