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.‌ ‌ ‌

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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(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.‌ ‌ ‌
 
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(b)Diagrammatically‌ ‌show‌ ‌and‌ ‌explain‌ ‌what‌ ‌happened‌ ‌to‌ ‌the‌ ‌oil‌ ‌market‌ ‌if‌ ‌the‌ ‌price‌ ‌remained‌ ‌unchanged‌ ‌despite‌ ‌the‌ ‌concerns‌ ‌over‌ ‌the‌ ‌fuel‌ ‌demand.‌ ‌
 
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(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 ‌both‌ ‌of‌ ‌the‌ ‌goods.‌ ‌ ‌
 
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