If the demand curve for kids' magazines is ln(Q) = 10 – 2ln(p), then the price elasticity of demand is given by Group of answer choices 1. -2p/Q 2. -0.25 3. -0.2 4. -2
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- The price elasticity of demand for air travel differs radically from first-class (1.3) to unrestricted coach (1.4) to restricted discount coach (1.9). What do these elasticities mean for optimal prices (fares) on a cross-country trip with incremental variable costs (marginal costs) equal to $120?If bus travel is an inferior good, its income elasticity of demand is a. strictly greater than 1. b. positive. c. equal to zero. d. negative.The Potomac Range Corporation manufactures a line of microwave ovens costing $500 each. Its sales have averaged about 6,000 units per month during the past year. In August, Potomacs closest competitor, Spring City Stove Works, cut its price for a closely competitive model from $600 to $450. Potomac noticed that its sales volume declined to 4,500 units per month after Spring City announced its price cut. What is the arc cross elasticity of demand between Potomacs oven and the competitive Spring City model? Would you say that these two firms are very dose competitors? What other factors could have influenced the observed relationship? If Potomac knows that the arc price elasticity of demand for its ovens is 3.0, what price would Potomac have to charge to sell the same number of units it did before the Spring City price cut?
- Suppose the demand function for flashlights is expressed as Q = 100 - 4p. If a flashlight currently sells for $10, then the point price elasticity of demand equals: Group of answer choices -4 -2.5 -0.67 -1.5A mechanical pencil manufacturer sells 3570 pencils per quarter for $0 per pencil. The price elasticity for the product was estimated to be 3.7. If the manufacturer decides to change the price by 18 percent then by what percentage should the quantity sold change? Report your percentage as a whole number such that 20 percent would be reported as 20 NOT 0.2If your marketing department estimates that the semiannual demand for the highlander is q=150,000. - 1.5 P, what price should you charge in order to maximize revenues from the sales of highlander
- The consumer demand for a given product (where x represents number of units and p represents price is $) is given by the function x= (45-3p)2 Using the concept of Elasticity of Demand, determine the price that the product should be sold at to maximize revenue. Round to the nearest tenth.Drill Quest, Inc. manufactures drill bits for the oil industry. Drill Quest uses cost-plus pricing to set the price of its bits. Currently Drill Quest applies a 50 percent markup on average total cost. Average variable cost of producing bits is constant and equal to $6,000 per bit. Total fixed cost at Drill Quest is $550,000. DrillQuest currently produces 690 bits. Statistical estimation of demand for Drill Quest brand bits produces the following linear demand equation (where Q is the number of bits demanded and P is the price of bits): Q = 1,200 − 0.05P Use the MR = SMC approach to finding the profit-maximizing point on the demand for Drill Quest’s bits. The profit-maximizing price to charge is $___________ per bit. Multiple Choice $15,000 $12,500 $10,378 $10,245 $10,000You are a division manager at Honda. If your data analytics department estimates that the semiannual demand for the Pilot is Q = 350,000 −1.6P, what price should you charge in order to maximize revenues from sales of the Pilot?
- The demand curve for a product is given by Qdx = 1,200 − 3Px − 0.1Pz where Pz = $300. a. What is the own price elasticity of demand when Px = $140? Is demand elastic or inelastic at this price? What would happen to the firm’s revenue if it decided to charge a price below $140? b. What is the own price elasticity of demand when Px = $240? Is demand elastic or inelastic at this price? What would happen to the firm’s revenue if it decided to charge a price above $240? c. What is the cross-price elasticity of demand between good X and good Z when Px = $140? Are goods X and Z substitutes or complemMr. Haris has the following demand equation for a certain product: Q = 30 - 2P. At a price of $7, what is the point elasticity? Between prices of $5 and $6, what is the arc elasticity? If the market is made up of 100 individuals with demand curves identical to Mr. Smith’s, what will be the point and arc elasticity for the conditions specified in parts a and b?Mr. Haris has the following demand equation for a certain product: Q = 30 - 2P. a. At a price of $7, what is the point elasticity? b. Between prices of $5 and $6, what is the arc elasticity? c. If the market is made up of 100 individuals with demand curves identical to Mr. Smith’s, what will be the point and arc elasticity for the conditions specified in parts a and b?
