Quantity Price (Dollars per cell phone) 200 (Cell phones per year) 50 45 250 300 350 40 35 400 30 a. What happens to total revenue if the price falls from $400 to $350 a phone and from $350 to $300 a phone? b. At what price is total revenue at a maximum? 2. Cups of coffee and donuts are complements. Both have inelastic demand. A hurricane destroys half the coffee bean crop. Use appropriately labeled diagrams to answer the following questions. (10) a. What happens to the price of coffee beans? b. What happens to the price of a cup of coffee? What happens to total expenditure on cups of coffee? c. What happens to the price of donuts? What happens to total expenditure on donuts?
Quantity Price (Dollars per cell phone) 200 (Cell phones per year) 50 45 250 300 350 40 35 400 30 a. What happens to total revenue if the price falls from $400 to $350 a phone and from $350 to $300 a phone? b. At what price is total revenue at a maximum? 2. Cups of coffee and donuts are complements. Both have inelastic demand. A hurricane destroys half the coffee bean crop. Use appropriately labeled diagrams to answer the following questions. (10) a. What happens to the price of coffee beans? b. What happens to the price of a cup of coffee? What happens to total expenditure on cups of coffee? c. What happens to the price of donuts? What happens to total expenditure on donuts?
Chapter6: Tracking The U.s. Economy
Section: Chapter Questions
Problem 4.8P
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