59 + In (65 - p -p³). The demand equation for a product is q = (a) Determine the point elasticity of demand when p = 4 and classify the demand as elastic, inelastic, or of unit elasticity at this price level. (b) If the price is lowered by 2% (from $4.00 to $3.92), use the answer to part (a) to estimate the corresponding percentage change in quantity sold. (c) Will the changes in part (b) result in an increase or decrease in revenue? Explain. ...... (a) The point elasticity of demand is when p = 4. (Round to two decimal places as needed.)

59 + In (65 - p -p³). The demand equation for a product is q = (a) Determine the point elasticity of demand when p = 4 and classify the demand as elastic, inelastic, or of unit elasticity at this price level. (b) If the price is lowered by 2% (from $4.00 to $3.92), use the answer to part (a) to estimate the corresponding percentage change in quantity sold. (c) Will the changes in part (b) result in an increase or decrease in revenue? Explain. ...... (a) The point elasticity of demand is when p = 4. (Round to two decimal places as needed.)

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter14A: The Practice Of Revenue Management

Section: Chapter Questions

Problem 1E

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d = annual demand for a product in units p = price per unit Assume that a firm accepts the following price-demand relationship as being a realistic represenation of its market: d = 800 - 10p; where p must be between $20 and $70. How many units can the firm sell at the $20 per unit price? And $70 per unit price? By how many units does a $1 increase decrease the demand?
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The price for cigarettes sold by Big Tobacco Co Ltd was6.00 per packet in March 2018. During the month of March, the consumption of cigarettes was 1000 packets. However, the Board of Directors of Big Tobacco Co Ltd decided to increase the price by 25% during the month of April. As a manager you noted that price elasticity of demand was 0.8. As a manager Big Tobacco Co Ltd: Advise your management ofthe strategy that could be adopted by your firm to maintain sales.
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he price for cigarettes sold by Big Tobacco Co Ltd was6.00 per packet in March 2018. During the month of March, the consumption of cigarettes was 1000 packets. However, the Board of Directors of Big Tobacco Co Ltd decided to increase the price by 25% during the month of April. As a manager you noted that price elasticity of demand was 0.8. As a manager Big Tobacco Co Ltd: Advise your management ofthe strategy that could be adopted by your firm to maintain sales. Also, advise your government on recommended interventions in the cigarette market.
For the toatl revenue equation R(q)=1000+1000q-8q^2 how does the second order sufficient condition establish that there is a maximum total revenue? What is the quantity where total revenue is maximized?
The price for cigarettes sold by Big Tobacco Co Ltd was 6.00 per packet in March 2018. During the month of March, the consumption of cigarettes was 1000 packets. However, the Board of Directors of Big Tobacco Co Ltd decided to increase the price by 25% during the month of April. As a manager you noted that price elasticity of demand was 0.8. As a manager Big Tobacco Co Ltd: As a manager Big Tobacco Co Ltd store advise your management of the strategy that could be adopted by your firm to maintain sales
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