Justina owns the Just’s Sobolo Store. She charges GHS10 per bottle for her handmade sobolo. You, the economist calculated the elasticity of demand for sobolo in her town to be 2.5. If she wants to increase her total revenue, what advice will you give her and why? Be able to explain your answer.

Justina owns the Just’s Sobolo Store. She charges GHS10 per bottle for her handmade sobolo. You, the economist calculated the elasticity of demand for sobolo in her town to be 2.5. If she wants to increase her total revenue, what advice will you give her and why? Be able to explain your answer.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter5: Elasticity

Section: Chapter Questions

Problem 34P: The equation for a demand curve is P=2/Q. What is the elasticity of demand as price falls from 5 to...

See similar textbooks

Related questions

Q: 3))Knitex wants to maximize its profits. It produces a product that has many substitutes and…

A: Price elasticity of demand (PED) is the responsiveness of a percentage change in quantity demanded…

Q: How can we increase the Total Revenue of products using elasticity? Explain by giving examples. Give…

A: The way to maximize the revenue is to identify the elasticity of demand. TR is the product of Prices…

Q: Q5. The cross price elasticity of demand for Air-conditioning units & kilowatts of electricity is(-)…

A: ed(elasticity of demand) is the ratio of the change in Qd(quantity demanded) and change in P(price).…

Q: What is the calculation for E= Question is : Adam makes specialized garden figurines in a small…

A: The term “price elasticity of demand” is defined as a measure to show the responsiveness of the…

Q: Fill in the blanks for each price-quantity combination listed in the following table. What…

A: The total revenue is the total receipts generated by a corporation or firm. It can be calculated by…

Q: Justina owns the Just’s Sobolo Store. She charges GHS10 per bottle for her handmade sobolo. You, the…

A: Price elasticity refers to the responsiveness of the quantity demanded of a good to a change in the…

Q: [Mcdonald's, a big burger joint, is charging $5 for its very famous Big Mac hamburger and selling…

A: Price elasticity of demand is the ratio of the percentage change in quantity demanded of a product…

Q: Assume that you own a local brewery and that you sell 12 packs of your beer for $10 each. You hire a…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Q3) Taiwan is a major world supplier of semiconductor chips. A recent earthquake severely damage the…

A: Elasticity is a basic statistic for how responsive an economic variable is to changes in another…

Q: _2. A poultry rancher discovered that when she increased the price of organic eggs from $0.75 to…

A: Price elasticity of demand measures the extent up to which the quantity demanded changes due to a…

Q: 5.B Justina owns the Just's Sobolo Store. She charges GHS10 per bottle for her handmade sobolo. You,…

A: Demand and supply are two market forces that operate in the market and regulate the market. Demand…

Q: #11. Nicolette raised her quantity demanded of hockey pucks from 100 to 150 when the price fell from…

A: Given Information- The quantity demand for good increased from 100 to 150 when the price fell from…

Q: 3. (20%) Elasticity (related to Total Revenue): (Please show your steps & decision rules) The demand…

Q: 3. In each case below, determine the effect on the sellers' total revenue and identify whether the…

A: Answer: Introduction: If the demand for a particular good is elastic then there will be an inverse…

Q: ou run a hotel and you have determined that if you lower the price of your rooms 15% you will be…

A: The price elasticity of demand measures the change in quantity demand regarding the change in price.…

Q: 2. Compute for the pure value of Price Elasticity of demand at every Point (A, B, C, D, E, F, G, H,…

Q: Explain the term price elasticity of demand? How is it measured? What factors influence market…

A: Hi! Thank you for the question, As per the honor code, we are allowed to answer three sub-parts at a…

Q: QUANTITY POINT POINT ARC ТОTAL POINT PRICE DEMANDED ELASTICITY 1 ELASTICITY 2 ELASTICITY REVENUE…

A: Given information Q=100-12.5P Given price and demand table

Q: I need d,e,f solved 1. Suppose John, the owner-manager of a local hotel, projects the following…

A: Note- Since you asked to solve D, E, and F. So, I am solving these only. Price Quantity…

Q: A news website reported (Feb. 17, 2020) that ridership of Karachi Metro Bus declined after a fare…

A: The “price elasticity of demand” is defined as a measure to show the responsiveness of the quantity…

Q: A recent study determined the following elasticities for Volkswagen Beetles: Price elasticity of…

Q: he elasticity from point A to point B seems different from the elasticity from point B to point A.…

A: Pt A: price =$4, quantity=120 Pt B: price=$6, quantity=80…

Q: Joy Lima manages a Sweet Chocolate Bar Store. She charges P100 per bar for her chocolate. You, the…

A: Here, it is given that Joy Lima charges P100 per bar of chocolate and has a price elasticity of…

Q: A rise in the price of a crate of Pepsi from GHS 20 to GHS 30 results in a fall in the quantity of…

A: Price of Pepsi rise from 20 to 30 The quantity demanded of Pepsi falls from 220 million to 180…

Q: 6. If the demand for chapati is elastic, then a decrease in the price of chapati will: aIncrease…

A: Price elasticity of demand can be defined as the ratio of the change in percentage of quantity…

Q: 3 A linear demand for lake front cabins on a nearby lake is estimated to be: Qp=900,000 - 2P. What…

A: Given: QD=900,000-2PP=$300,000 Point price elastcity:Ep=(∂Q/∂P)(P/Q)

Q: A firm is considering a change to its product's price. It conducts market research which reveals…

A: As per guidelines, we are supposed to solve only one question with it 3 subparts. Given Price…

Q: a. Calculate the price elasticity of demand for the Yoghurts over this price range. b. Is demand…

A: Revenue is the total income earned by selling the products and services in the market.

Q: Blue berry pharmaceuticals in Bangladesh has decided to increase their yearly spending advertisement…

A: Given information, Initial expenditure on advertisement= 10 million Final expenditure on…

Q: a. What is the own price elasticity of demand when Px = $140? Is demand elastic or inelastic at this…

Q: Explain why the choice between 1, 2, 3, 4, 5, 6, 7, and 8 “units,” or 1000, 2000, 3000, 4000, 5000,…

A: The elasticity of demand accounts for how much the quantity demanded will change as a response to a…

Q: Q.4 a) What can be said about the price elasticity of demand in each of the following statements?…

A: "Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Below find a demand schedule for Kim and Kylie (not a fan, just all I could think of) showing price…

A: The elasticity of demand is the degree of responsiveness from the part of the consumer towards the…

Q: Q 2. i) How can we differentiate Elastic and Inelastic Price Elasticity of Demand? ii) Calculate…

A: In economics, elasticity of demand explains the change in units demanded by buyers in reaction to a…

Q: John owns the Latin Chocolate store. He charges $5 per pound for her hand made chocolate. You, the…

A: John is now the owner of Latin Chocolate store and charging $5/hand made chocolate. Having price…

Q: Q4. a) Give your own example (think about your own tastes&preferences, i.e., you cannot use examples…

A: The elasticity refers to the responsiveness of the quantity demand due to change in the price. If…

Q: The makers of Expresso know that the prices of other products might decrease soon. The cross-price…

A: Cross-price elasticity of demand measures the responsiveness of quantity demanded of one good when…

Q: cookies for $4 a dozen. She sells 50 dozen, and decides that she can charge more. She raises the…

A: Price elasticity of demand depicts how much consumer responds with the change in price.

Q: Anna owns the Sweet Alps Chocolate store. She charges $500 per pound for her hand made chocolate.…

A: Price elasticity of demand refers to percentage change in quantity demanded with respect to…

Q: Suppose the price elasticity of demand for a firm's specific product is given by E = 2*(0.5-171/Q).…

A: Elasticity of demand: - Elasticity of demand measures the responsiveness of change in demand due to…

Q: n a burns-road food street, there is a youngest 12-year-old entrepreneur. His most recent venture…

A: Initial: price 1 - Rs 60 quantity 1 - 100 units final: price 2 - Rs 40 quantity 2 - 300 units

Q: Due to the COVID-19, the price of hand-sanitizer increases from 150 taka to 250 taka. In response,…

A: Given Information: Initial price P0 = 150 New price P1 = 250 Initial quantity Q0 = 20 units New…

Q: Mcdonald's, a big burger joint, is charging $5 for its very famous Big Mac hamburger and selling…

A: (a). P1=$5Q1=20million P2=$6 Q2=Q1=20million Total Revenue=P×Q =6×20 million =120 million Price…

Q: Suppose that business travelers and vacationers have the following demand for airline tickets from…

A: a) (1) Price elasticity using midpoint method for Business travelers : Old price = $200, New price…

Q: information. 18. Suppose that the own-price elasticity for Al-Marai cocktail juice is 1.85 In order…

A: As its own price elasticity of demand is inelastic -1..86, therefore, an increase in price will…

Q: (a) Obtain a formula for the price elasticity of demand for E = mc² T-shirts. E = (b) Compute the…

A: Price elasticity of demand is the change in quantity demanded of goods and services with respect to…

Q: You sell two different goods: printers and toner cartridges. The price elasticity of demand for the…

A: Price elasticity of demand measures the responsiveness in change in quantity demanded if a commodity…

Q: 2: The price elasticity of demand for Nanay Flor's Photography is 0.5. If the %AQ=10%. What is the…

A: Note: We will answer the first question as the exact one was not specified. Please resubmit a new…

Q: 9. Elasticity and total revenue The following graph shows the demand curve for kumquats. Points A,…

A: Midpoint elasticity can be calculated by using the following formula: Price elasticity between point…

Question

5.BJustina owns the Just’s Sobolo Store. She charges GHS10 per bottle for her handmade sobolo. You, the economist calculated the elasticity of demand for sobolo in her town to be 2.5. If she wants to increase her total revenue, what advice will you give her and why? Be able to explain your answer.

Video Video

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

From the data in Table 5.6 about supply of alarm clocks, calculate the price elasticity of supply from: point J to point K, point L to point M, and point N to point P. Classify the elasticity at each point as elastic, inelastic, or unit elastic.
The price elasticity of the demand for gasoline is -0.02. The price elasticity of demand for gasoline at Joe’s 66 station is -1.2. Explain what might account for the different elasticities.
From the data in Table 5.5 about demand for smart phones, calculate the price elasticity of demand from: point B to point C, point D to point E, and point G to point H. Classify the elasticity at each point as elastic, inelastic, or unit elastic.
Isabella always spends $50 on red roses each month and simply adjusts the quantity she purchases as the price changes. What can you say about Isabella's elasticity of demand for roses?
The equation for a demand curve is P=2/Q. What is the elasticity of demand as price falls from 5 to 4? What is the elasticity of demand as the price falls from 9 to 8? Would you expect these answers to be the same?
According to the previous discussion, what factors influence the price elasticity of demand for cigarettes? What other factors not mentioned in the article might influence the price elasticity of demand for cigarettes?