Using regression analysis on data from a field experiment, the demand curve for a product is estimated to be QXd = 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? Enter your response rounded to two decimal places. Own price elasticity: Demand is:           . If the firm prices below $140, revenue will:

Every month a certain firm purchases exactly 50 bottles of water to restock its kitchen, regardless of price. Assume that the whole water stock is consumed during the work week and that no extra bottles will be purchased. What is the firm's own price elasticity of demand for this product in absolute value?

1) Assume that the percentage change of the price of product A is 5% (%Px and the percentage change of quantity demanded is - 10% (%Δqd), Find the following, a) The price elasticity of demand b) Is the demand for this product elastic or inelastic? c) If the price of the product A increases, What happens to total revenue? (increases or decreases)  d) if the price increases by 1% by how much quantity demanded will decrease (more than 1%, less than 1%, or by exactly by 1%) 2) Assume that the percentage increase in the price of product X ( %ΔPx) is 4% and the percentage change in quantity demanded in product Y ( %Δqd) is -5%, find the cross price elasticity (Eyx), are product X and Y substitutes or complements? 3) Assume that the percentage increase in income (%ΔI) is 4% and the percentage decrease in the quantity demanded  (%Δq) is -6%, find  income elasticity (EI), Is this product a normal or inferior product? 4) Is the elasticity for Corn flakes cereal is greater of less than the…

ABC Manufacturing has determined that the demand function for their heated socks is given by: 6 D(p) = 170 --p². a. Find E(p), the Elasticity of Demand as a function of price, p. E(p) = b. Find the Elasticity of Demand when heated socks are selling at a price of $5. Give result accurate to at least 3 decimal places. E(5) c. At this price ($5): We would say the demand for heated socks is: [Select an answer Based on this, in order to increase revenue we should: [Select an answer d. Use the Elasticity model to determine the price that maximizes revenue. (Round result to 2 decimal places.) P =

The demand function for product is p = -4q+400 and the average cost for producing q units 500 is c = 37q + 40 + where p= price, and q= quantity demand. 2 9 1. 2. 3. 4. Compute the point elasticity of demand and find the intervals where the demand is inelastic, elastic, and the price for which the demand is unit elastic. Find the quantity that maximizes the total revenue and the corresponding price. Interpret your result. Find the quantity that minimizes the average cost function and the corresponding price. Interpret your results. What are the quantity and the price that maximize the profit? What is the maximum profit? Interpret your result.

Q. Wilpen Company, a price-setting firm, produces nearly 80 percent of all tennis balls purchased in the United States. Wilpen estimates the U.S. demand for its tennis balls by using the following linear specification: Q = a + bP + cM + dPR. Where Q is the number of cans of tennis balls sold quarterly, P is the wholesale price Wilpen charges for a can of tennis balls, M is the consumers’ average household income, and PR is the average price of tennis rackets. The regression results are as follows: a- Discuss the statistical significance of the parameter estimates a^, b^, c^, and d^ using the p-values. Are the signs of b^, c^, and d^ consistent with the theory of demand? Wilpen plans to charge a wholesale price of $1.65 per can. The average price of a tennis racket is $110, and consumers’ average household income is $24,600. b. What is the estimated number of cans of tennis balls demanded? c) At the values of P, M, and Pr given, what are the estimated values of the price (E^), income…

1) Assume that the percentage change of the price of product A is 5% (%Px and the percentage change of quantity demanded is - 10% (%Δqd), Find the following, a) The price elasticity of demand b) Is the demand for this product elastic or inelastic? c) If the price of the product A increases, What happens to total revenue? (increases or decreases)  d) if the price increases by 1% by how much quantity demanded will decrease (more than 1%, less than 1%, or by exactly by 1%)   2) Assume that the percentage increase in the price of product X ( %ΔPx) is 4% and the percentage change in quantity demanded in product Y ( %Δqd) is -5%, find the cross price elasticity (Eyx), are product X and Y substitutes or complements?         3) Assume that the percentage increase in income (%ΔI) is 4% and the percentage decrease in the quantity demanded  (%Δq) is -6%, find  income elasticity (EI), Is this product a normal or inferior product?       4) Is the elasticity for Corn flakes cereal is greater of less…

am. 153.

Assume that the price elasticity of demand is -2 for a certain firm's product. If the firm raises price, the firm's managers can expect total revenue to:  decrease.  increase.  remain constant.  either increase or remain constant, depending upon the size of the price increase. A price elasticity of zero corresponds to a demand curve that is:  horizontal.  downward sloping with a slope always equal to 1.  vertical.  either vertical or horizontal. As we move down along a linear demand curve, the price elasticity of demand becomes more:  elastic.  Inelastic.  linear.  variable.

one demand function is linear and the other is called a constant elasticity demand function. Using data tables, show that the price elasticity in the linear demand function is not constant in price, and show that the price elasticity is constant in the constant elasticity demand function.