Hi, could you help my resolve thi homework?Q1) Bookshelf.com, the online bookseller, wants to increase its total revenue. One strategy is to offer a 10% discount on every book it sells. Bookshelf.com knows that its customers can be divided into two distinct groups according to their likely responses to the discount. The accompanying table shows how the two groups respond to the discount. Group A (sales per week)Group B (sales per week)Volume of sales before the 20% discount3.1 million3.0 millionVolume of sales after the 20% discount3.3 million3.4 millionCalculate the price elasticities of demand for group A and group B.Explain how the discount will affect total revenue from each group.Suppose Bookshelf.com knows which group each customer belongs to when he logs on and can choose whether or not to offer the 10% discount. If Bookshelf.com wants to increase its total revenue, should discounts be offered to group A or to group B, to neither group, or to both groups?

The term elasticity means responsiveness. The concept of elasticity was introduced to economics by…

Answered: Calculate the price elasticities of…

Microeconomics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506893

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter7: Consumer Choice And Elasticity

Section: Chapter Questions

Problem 13CQ: Suppose Erin, the owner-manager of a local hotel projects the following demand for her rooms: a....

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Hi, could you help my resolve thi homework?

Q1) Bookshelf.com, the online bookseller, wants to increase its total revenue. One strategy is to offer a 10% discount on every book it sells. Bookshelf.com knows that its customers can be divided into two distinct groups according to their likely responses to the discount. The accompanying table shows how the two groups respond to the discount.

	Group A (sales per week)	Group B (sales per week)
Volume of sales before the 20% discount	3.1 million	3.0 million
Volume of sales after the 20% discount	3.3 million	3.4 million

Calculate the price elasticities of demand for group A and group B.
Explain how the discount will affect total revenue from each group.
Suppose Bookshelf.com knows which group each customer belongs to when he logs on and can choose whether or not to offer the 10% discount. If Bookshelf.com wants to increase its total revenue, should discounts be offered to group A or to group B, to neither group, or to both groups?

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