1. Determine the required ADR. 2. Assume the Bruno has both single and double rooms. Further assume that 80 percent of rooms sold are doubles and that doubles sell for $20 more than the price of a single. What is the average selling price of a double? bi Problem 9 The Squish, an upscale 150-seat restaurant, revises its menu every six months. The revisions are based, in part, on the price elasticity of demand for their menu items. During the thirty- day periods before and after the last menu revision, the selling prices and quantity sold of temvo srli three items were as follows: Item hote w Prior to Revision After Revision Price e Quantity Price Quantity Super Burger Golden Chicken $4.95 $6.45 $6.45 450 400 $5.45 $5.95 800 1,000 Ocean Delight 600 $6.95 400 The above sales quantities have remained fairly constant each month since the last menu revision. insois Oolos xel soooml C Required: R the 1. Compute the price elasticity of demand for each menu item. 08 nSTL 2. Advise Kay Rae, the manager, of the implications of your results for each menu item. Ovsaiblina Problem 10

1. Determine the required ADR. 2. Assume the Bruno has both single and double rooms. Further assume that 80 percent of rooms sold are doubles and that doubles sell for $20 more than the price of a single. What is the average selling price of a double? bi Problem 9 The Squish, an upscale 150-seat restaurant, revises its menu every six months. The revisions are based, in part, on the price elasticity of demand for their menu items. During the thirty- day periods before and after the last menu revision, the selling prices and quantity sold of temvo srli three items were as follows: Item hote w Prior to Revision After Revision Price e Quantity Price Quantity Super Burger Golden Chicken $4.95 $6.45 $6.45 450 400 $5.45 $5.95 800 1,000 Ocean Delight 600 $6.95 400 The above sales quantities have remained fairly constant each month since the last menu revision. insois Oolos xel soooml C Required: R the 1. Compute the price elasticity of demand for each menu item. 08 nSTL 2. Advise Kay Rae, the manager, of the implications of your results for each menu item. Ovsaiblina Problem 10

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter2: Mathematics For Microeconomics

Section: Chapter Questions

Problem 2.16P

See similar textbooks

Similar questions

If Andrew would like to buy slippers, he has to check the prices and the number of quantities that will fit to his financial capabilities. If at a price of $220 he can buy 3 slippers, however if he will be given a discount of $50, he would like to buy 5 slippers. Show the value of E using the Price elasticity formula and identify the kinds of E. Let’s see of his capabilities be translated based on his income of $8,000 and an increase of 20% with the same number of slippers. What do you think of his EY and what kind of goods he is capable of buying? On the other hand if changes in price would be interpreted by looking at its cross relationship with same price original and a 35% increase in price due to inflation, but still Andrew, considered the same number of quantities since its Christmas season.
The manager of a small town grocery store who is in charge of ordering products reads in the newspaper that the unemployment related to the Covid-19pandemic is expected to decrease local incomes by 2596 on average in the next month. He knows that the income elasticity of demand for rice isapproximately -0.5. Given that rice is agood, the manager should stockrice.O A. normal: 109 moreO B. inferior: 12.595 moreO C. inferior: 12.59 lessO D. normal: 12.596 less
D4 Question: Using the equation below, calculate the Own Price, Cross Price, and Income Elasticity and make the conclusion of the final answer. Q = 10 - 2P + 0.40Pr - 0.20I Where = P = 2, Pr = 3 and I = 200
A4 A known phenomenon in everyday life is that often in a purchase situation there is a deviation between the original asking price from the seller (in form of “manufacturer’s suggested retail price” (MSRP), list price etc.) and the transaction price you as a consumer actually pay in the end. This deviation is due to different forms of tactical discounting practices according to Smith. The seller company usually put in a lot of efforts to managing these price variances. But could you theoretically explain this deviation in a purchase situation out of the consumer’s perspective. This on how it impacts the behavior and decision making of the consumer? Use concepts e.g., like customer utility, willingness-to-pay, consumer surplus, and reference price in your explication. Also, out of your above answer and your now extensive knowledge in pricing theory – what could be major flaws in the proposing argument that it would be better for everybody (society, citizens, consumers, companies etc.)…
6 Q - is folding bike priced at $800 - $1000 considered elastic or inelastic? For comparison, other bikes are sold in $200-$300 range
Given: Qd = 800 - 4P Qs = 8P - 400 What is the Arc Elasticity where P = 150 and P = 100?
(a)Diagrammatically‌ ‌show‌ ‌and‌ ‌explain‌ ‌how‌ ‌oil‌ ‌prices‌ ‌dropped‌ ‌as‌ ‌concerns‌ ‌over‌ ‌fuel‌ ‌demand‌ ‌in‌ ‌the‌ ‌near‌ ‌term‌ ‌in‌ ‌COVID-19‌ ‌pandemic‌ ‌hit‌ ‌Europe‌ ‌and‌ ‌the‌ ‌United‌ ‌States.‌ ‌ ‌ ‌ ‌ (b)Diagrammatically‌ ‌show‌ ‌and‌ ‌explain‌ ‌what‌ ‌happened‌ ‌to‌ ‌the‌ ‌oil‌ ‌market‌ ‌if‌ ‌the‌ ‌price‌ ‌remained‌ ‌unchanged‌ ‌despite‌ ‌the‌ ‌concerns‌ ‌over‌ ‌the‌ ‌fuel‌ ‌demand.‌ ‌ ‌ (c)You‌ ‌sell‌ ‌two‌ ‌different‌ ‌goods:‌ ‌printers‌ ‌and‌ ‌toner‌ ‌cartridges.‌ ‌The‌ ‌price‌ ‌elasticity‌ ‌of‌ ‌demand‌ ‌for‌ ‌the‌ ‌printers‌ ‌is‌ ‌-3.4,‌ ‌and‌ ‌you‌ ‌earn‌ ‌a‌ ‌revenue‌ ‌of‌ ‌RM15,000‌ ‌per‌ ‌month‌ ‌from‌ ‌the‌ ‌good.‌ ‌You‌ ‌earn‌ ‌a‌ ‌revenue‌ ‌of‌ ‌RM5,000‌ ‌per‌ ‌month‌ ‌from‌ ‌the‌ ‌toner‌ ‌cartridges.‌ ‌The‌ ‌cross‌ ‌price‌ ‌elasticity‌ ‌of‌ ‌demand‌ ‌for‌ ‌both‌ ‌of‌ ‌the‌ ‌goods‌ ‌is‌ ‌-2.5.‌ ‌If‌ ‌you‌ ‌decide‌ ‌to‌ ‌decrease‌ ‌the‌ ‌price‌ ‌of‌ ‌the‌ ‌printers‌ ‌by‌ ‌5%,‌ ‌calculate‌ ‌your‌ ‌new‌ ‌total‌ ‌revenues‌ ‌for‌…
Exercise 2. The demand curve for a product is given Qd = 1500 − 5Px − 0.2Pz by where Pz = $300. What is the own-price elasticity of demand when Px = $200? Is demand elastic or inelastic at this price? What would happen to the firm’s revenue if it decided to charge a price below $200? What is the own-price elasticity of demand when Px = $125? Is demand elastic or inelastic at this price? What would happen to the firm’s revenue if it decided to charge a price above $125? What is the cross-price elasticity of demand between good X and good Z when Px =$125? What about when Px = $200? Are goods X and Z substitutes or complements?
3. Your marketing research department provides the following estimated demand function for your product: QD = 150 – 6.5P + 0.3Income, where P is the price of your product and Income is the average income of the consumers for your product. a. The T statistic for the price coefficient is -2.2. What can you conclude about the coefficients statistical significance? Explain.
Qd= 25000-2p Qs= 10000-1p Calculate the market equlibrium level of price and quantity for housing unit? Calculate price elasticity of demand using point elasticity method when industry is in equlibrium and interpret the result?
The estimated monthly sales of Mona Lisa paint-by-number sets is given by the formula q = 95ep − 3p2⁄2, where q is the demand in monthly sales and p is the retail price in hundreds of yen. (a)Determine the price elasticity of demand E when the retail price is set at ¥300. E = Interpret your answer. The demand is going by % per 1% increase in price at that price level. Thus, a large price ___ is advised. (b)At what price will revenue be a maximum? (Round your answer to the nearest integer.) yen (c)Approximately how many paint-by-number sets will be sold per month at the price in part (b)? (Round your answer to the nearest integer.) paint-by-number sets per month
Pls answer it with step by step explanation