Price(dollars perburrito)$3.002.502.001.501.00DemandQuantity(burritos)3.Refer to Figure above. At what price is the seller's total revenue maximized?O IndeterminateO $1.50 because the price elasticity of demand at that price is unit elastic.O $1.25 because the price elasticity of demand at that price is unit elasticO $1.75 because the price elasticity of demand at that price is elastic

From the given data, we can see that seller's total revenue will be maximised when the price is…

Answered: Price (dollars per burrito) $3.00 2.50…

Business

Economics

Price (dollars per burrito) $3.00 2.50 2.00 1.50 1.00 Demand Quantity (burritos) 1. 3. 2.

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter5: Elastic And Its Application

Section: Chapter Questions

Problem 5CQQ: An increase in the supply of a good will decrease the total revenue producers receive if a. the...

See similar textbooks

Related questions

Q: why are interest rate not affected by permanent changes in money supply in the long run

A: The rate of return is a proportion of the principal—the amount borrowed—that a lender charges a borr...

Q: A firm considering the installation of an automatic data processing unit to handle some of its accou...

Q: Option strike prices are set by the exchange a. True b. False

A: An international exchange rate, also said as a foreign exchange rate. It is the price of a currency ...

Q: What would happen if you couldn’t withdraw your money from the bank?

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

Q: Suppose market demand and supply are given by Qd = 100 – 2P and Qs = 5 + 3P. If the government sets ...

A: At price 30, Quantity demanded can be found out by substituting P = 30 in the demand function. At pr...

Q: Skip to question Assume that the parameters of a particular economy are as follows (all figures a...

A: GIVEN C = 100 + 0.75Y I = 50 Y = C + I Y = 100 + 0.75 Y + 50 Y – 0.75 Y = 150

Q: Which is not an accurate summary of the Columbian Exchange? The idea of a would wide economy based i...

A: The "Columbian exchange" is also referred to as the Columbian interchange, it was the widespread tra...

Q: Government spending increases from G1 to G2. Which of the following diagrams best represent the chan...

A: Picture A is the correct one. If Y=C+G. C=Y-G with h-l = 24 hrs or labor =0, Y=0, C=-G

Q: An annual deposit of A1-$1,500 in a saving account is made for 6 years starting year 1. In year 9, a...

A: A1 = $1500 n1 = 6 years In year 9 - OTD - $3500 In year 11 - OTW - $2500 From year 12: A2 = ? n2 = ...

Q: Next question A example of a good with external benefits is A. a sewing machine. B. a pair of runnin...

A: Externality refers to spill-over effect of production or consumption of the good on third party or s...

Q: The Chicago Bears offer what are essentially two products: preseason and regular season football gam...

A: Total revenue is the total receipts a dealer can acquire from offering labor and products to purchas...

Q: Which of the following items is a good synonym for “crony capitalism”? a. Prejudice b. Bribery c. Co...

A: Crony Capitalism: The term Crony Capitalism refers to the economy in which the growth and success of...

Q: In a competitive market, what should consumer do if the marginal utilities/prices ratios are NOT sam...

A: competitive market is the form of market structure where large numbers of buyers and sellers exchang...

Q: Imposing a sales tax on sellers of a product has an effect that is similar to which of the following...

A: Implementation of sales tax on the sellers will affect the supply of the goods.

Q: The figure shows the market for tires. The figure shows that the government has imposed a tax of per...

A: When a tax is levied on a transaction, it impacts both the buyer and seller. The tax burden is deter...

Q: hates that the cost of steel bodies for pressure valves will increase by $2 every 3 month pe $80, wh...

A: *Answer:

Q: Now, suppose that Home applies an import quota limiting the amount Foreign can sell to 2 units. The ...

A: (a) Consumer Surplus: Area above price line and below demand curve = 12* 8 * (14-6) = 32 Producer su...

Q: How much do eight ₱ 69,058 quarterly payments amount at present, if the interest rate is 3 compounde...

A: Eight equal payment of 69058 quarterly for 8quarters. This is case of annuity where constant amount ...

Q: oj Consider the Cobb-Douglas production function P(L, K) total units of production when 19 units of ...

A: Here we calculate the total unit of production of the given Cobb-Douglas production function by usin...

Q: Case Study 1: Nancy is leading a Scrum project for her organization. The project is to create new s...

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

Q: n your view, should an organization engage in a dialogue with all of its stakeholders all of the tim...

A: Stakeholder: A stakeholder is a party that has an interest in an organization and can either influen...

Q: Draw the indifference curves when X is fake news or hoax, Y is journalist’s work winning the Pulitze...

A: Optimal choice - It is the best combination of goods which will lead to the best satisfaction of the...

Q: Consider some determinants of the price elasticity of demand: • The availability of close substitute...

A: Note:- Since we can only answer one question at a time, we'll answer the first one. Please repost th...

Q: I went to the store to buy new bookbag. I expected to pay $50. It was only $30. I got a _________...

A: Consumer willingness to pay measures or represents the cost of a good or service to a buyer.

Q: Check My Work The Widespread Reach of Economies. Explain why the science of economics is roncerned w...

A: Studying economic events at the micro-level and macro-level answers different economic questions

Q: Jack borrowed $10,000 from Mr. Jill on July 11, 2018 and promised to pay it by December 21, 2018. Ho...

A: Given the borrowed amount = $10000 Interest rate = 15% Total number of days between the given months...

Q: If there is a surplus of loanable funds, then

A: When there is any excess supply of anything above the demand then it will cause surplus. Note:- We’l...

Q: Attempts Keep the Highest/ 4 3. Gains from trade Consider two neighboring island countries called Co...

A: If a country can produce a good at a lower opportunity cost it is said to have a comparative advanta...

Q: Real World Medical Technology is putting together its R&D budget for the coming year. The firm has c...

A: Given the table:

Q: Macroeconomists are interested in two types of phenomena: economic growth and business cycles. Expla...

A: Macroeconomists are interested in two types of phenomena: economic growth and business cycles. This ...

Q: Table 29-4 Bank of Pleasantville Assets Liabilities Reserves $3,000 Deposits $50,000 Loans 47,000...

A: The money provide is that the total quantity of currency and different quick assets in a very countr...

Q: The price elasticity of demand measures how much the quantity demanded responds to changes in the pr...

A: The elasticity of demand measures the responsiveness of items demanded. The demand determinant for w...

Q: original cost of modem equipment is P 300,000 and it is depreciated by a 10% sinking fund method. De...

A: In economics matters, devaluation or depreciation is the progressive diminishing in the monetary wor...

Q: The figure shows the market for tires. According to the figure, the government collects per month in...

A: We can calculate the amount of revenue earned by the government by taxes with the following formula:...

Q: Would you expect supply to play a more significant role in determining the price of a basic necessit...

A: Elasticity is defined as the responsiveness or sensitiveness on the demand if the factor influencing...

Q: Market failure refers to a situation when a. Social efficiency is not achieved b. Perfectly compet...

A: The economic condition described by the inefficient distribution of products and services in the fre...

Q: pls solve this question within 20-30 minutes I'll give you multiple upvotes. Please obtain the same ...

A: There are many changes you can make to your home to increase its value. You may consider new landsca...

Q: Enumerate at least five interpretations of the graph of the Total Utility curve

A: Total utility: It is the total amount of utility that will be achieved by the consumers by consuming...

Q: Which of the following is not a fixed cost?

A: C.Front Office Pay

Q: A regional municipality is studying a water supply plan for its tri-city and surrounding area to the...

A: The current worth of a quantity of money – or a stream of cash flows – that is predicted in the futu...

Q: Suppose the the demand function is p(z) = (51 – 3z) (for z < 17). %3D A. What is the marginal price ...

A: Demand function shows the functional relationship between Quantity demanded for a commodity and its ...

Q: Suppose that a consumer cannot vary hours of work as he or she chooses. In particular, he or she mus...

A: Givendata suppose that a conscime canot very hours of work as he or she choose. En particulay, he op...

Q: The fraction of z-scores that fall within z = ±1.60 is ________. a 0.8904 b 0.8729 c...

A: The answer is a. 0.8904. Fraction of values under -1.60 is .0548 Fraction of values under 1.60 is .9...

Q: If GDP is $20 trillion, how many years will it take for GDP to increase to $160 trillion if annual g...

A: GDP measures the value of goods and services that are produced within the economy in a given year. I...

Q: Use the following information for all of the questions in this Check Point: Y $14 trillion C- $8 tri...

A: The economies around the globe tend to have various entities, which are in the form of households, f...

Q: QUESTION 1 An interest rate of 38% per year, compounded monthly, is nearest to * per year Enter the ...

A: DISCLAIMER :- As you posted multiple questions we are supposed to solve the first one only as per gu...

Q: A regional municipality is studying a water supply plan for its tri-city and surrounding area to th...

A: The cost of project included construction cost and maintenance and repair cost . And the project pe...

Q: Yakov lives in Montreal and runs a business that sells boats. In an average year, he receives $793,0...

A: Answer: Explicit cost: it refers to the payment made to the factor hired or resources purchased from...

Q: bought a property and he paid php 100000 cas and agreed to pay php 20000 at the end of each 6 months...

A: *Answer:

Q: Refer to Fig. 7.4 and Example 7.4 - 'The Effect of Effluent Fees on Input Choices'.How should the ma...

A: The Environmental Protection Agency is a federal government agency in the United States whose missio...

Concept explainers

Non-Durable Goods

Non-durable goods are goods that can only be used over a short period because of their nature. Non-durable goods have the nature of spoiling or wearing out after a certain point of time.

Question

Price
(dollars per
burrito)
$3.00
2.50
2.00
1.50
1.00
Demand
Quantity
(burritos)
3.
Refer to Figure above. At what price is the seller's total revenue maximized?
O Indeterminate
O $1.50 because the price elasticity of demand at that price is unit elastic.
O $1.25 because the price elasticity of demand at that price is unit elastic
O $1.75 because the price elasticity of demand at that price is elastic

Expert Solution

This question has been solved!

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

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

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

Describe the general appearance of a demand or a supply curve with infinite elasticity.
Using the midpoint formula for calculating the elasticity of supply, if the price of a good rose from $95 to $105, what would be the elasticity of supply if the quantity supplied changed from a. 38 to 42? b. 78 to 82? c. 54 to 66?
What is the relationship between price elasticity and position on the demand curve? For example, as you move up the demand curve to higher prices and lower quantities, what happens lo the measured elasticity? How would you explain that?
The Stopdecay Company sells an electric toothbrush for $25. Its sales have averaged 8,000 units per month over the past year. Recently, its closest competitor, Decayfigh ter, reduced the price of its electric toothbrush from $35 to $30. As a result, Stopde cays sales declined by 1,500 units per month. What is the arc cross elasticity of demand between Stopdecays toothbrush and Decayfighters toothbrush? What does this indicate about the relationship between the two products? If Stopdecay knows that the arc price elasticity of demand for its toothbrush is 1.5, what price would Stopdecay have to charge to sell the same number of units as it did before the Decayfighter price cut? Assume that Decayfighter holds the price of its toothbrush constant at $30. What is Stopdecays average monthly total revenue from the sale of electric toothbrushes before and after the price change determined in part (b)? Is the result in part (c) necessarily desirable? What other factors would have to be taken into consideration?
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.
Suppose you are in change of sales at a pharmaceutical company, and your firm has a new drug that causes bald men to grow hair. Assume that the company wants to earn as much revenue as possible from this drug. If the elasticity of demand for your companys product at the current price is 1.4, would you advise the company to raise the price, lower the price, or to keep the price the same? What if the elasticity were 0.6? What if it were 1? Explain your answer.
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.
What would the gasoline price elasticity of supply mean to UPS or FedEx?
An increase in the supply of a good will decrease the total revenue producers receive if a. the demand curve is inelastic. b. the demand curve is elastic. c. the supply curve is inelastic. d. the supply curve is elastic.
(Price Elasticity of Supply) Calculate the price elasticity of supply for each of the following combinations of price and quantity supplied. In each case, determine whether supply is elastic, inelastic, perfectly elastic, perfectly inelastic, or unit elastic. a. Price falls from $2.25 to $1.75; quantity supplied falls from 600 units to 400 units. b. Price falls from $2.25 to $1.75; quantity supplied falls from 600 units to 500 units. c. Price falls from $2.25 to $1.75; quantity supplied remains at 600 units. d. Price increases from $1.75 to $2.25, quantity supplied increases from 466.67 units to 600 units.
A price change causes the quantity demanded of a good to decrease by 30 percent, while the total revenue of that good increases by 15 percent. Is the demand curve elastic or inelastic? Explain.