Q.3.1 A store that sells maize meal discovers that when the price of 1kg maize meal IsR24 per kilogram, the quantity demanded is 306 kgs per week. When the pricedecreases to R21 per kg, then the sales increase to 340 kgs per week. Use thisinformation to answer questions Q.3.1.1 and Q.3.1.2 below.(5)Q.3.1.1 Determine the price elasticity of maize meal using the Arc method.Q.3.1.2 Discuss the relationship between the price elasticity of maize mealand the total revenue the store received from the sales. Advise thestore on an appropriate pricing strategy.(7)

Q.3.1 A store that sells maize meal discovers that when the price of 1kg maize meal Is R24 per kilogram, the quantity demanded is 306 kgs per week. When the price decreases to R21 per kg, then the sales increase to 340 kgs per week. Use this information to answer questions Q.3.1.1 and Q.3.1.2 below. Q.3.1.1 Determine the price elasticity of maize meal using the Arc method. Q.3.1.2 Discuss the relationship between the price elasticity of maize meal and the total revenue the store received from the sales. Advise the (5) (7)

Q.3.1 A store that sells maize meal discovers that when the price of 1kg maize meal Is R24 per kilogram, the quantity demanded is 306 kgs per week. When the price decreases to R21 per kg, then the sales increase to 340 kgs per week. Use this information to answer questions Q.3.1.1 and Q.3.1.2 below. Q.3.1.1 Determine the price elasticity of maize meal using the Arc method. Q.3.1.2 Discuss the relationship between the price elasticity of maize meal and the total revenue the store received from the sales. Advise the (5) (7)

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter7: Uncertainty

Section: Chapter Questions

Problem 7.8P

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A store that sells maize meal discovers that when the price of 1kg maize meal Is R24 per kilogram, the quantity demanded is 306 kgs per week. When the price decreases to R21 per kg, then the sales increase to 340 kgs per week.
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