Using the midpoint formula calculate the price elasticity of demand when price increased from 150,000 to 300,000. Also explain and illustrates if the demand is elastic or inelastic. Find the cross-price elasticity of demand if the price of turkey package increased from 300,000 to 450,000. Explain if the two goods in question are substitute and complements. With the reference to your answer in part (a), suppose you are asked as a manager of traveling company to ensure maximum revenue generation for your firm in Turkey. Justify how you would increase the firm revenues
Using the midpoint formula calculate the price elasticity of demand when price increased from 150,000 to 300,000. Also explain and illustrates if the demand is elastic or inelastic. Find the cross-price elasticity of demand if the price of turkey package increased from 300,000 to 450,000. Explain if the two goods in question are substitute and complements. With the reference to your answer in part (a), suppose you are asked as a manager of traveling company to ensure maximum revenue generation for your firm in Turkey. Justify how you would increase the firm revenues
Microeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter7: Consumer Choice And Elasticity
Section: Chapter Questions
Problem 13CQ: Suppose Erin, the owner-manager of a local hotel projects the following demand for her rooms: a....
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Question
As the lockdown around the traveling destinations of the world began to ease and there is an increase in the
Price |
Quantity Demanded Turkey |
Quantity Demanded Malaysia |
150,000 |
65,000 |
50,000 |
300,000 |
48,000 |
55,500 |
450,000 |
30,000 |
58,000 |
- Using the midpoint formula calculate the price elasticity of demand when price increased from 150,000 to 300,000. Also explain and illustrates if the demand is elastic or inelastic.
- Find the cross-price elasticity of demand if the price of turkey package increased from 300,000 to 450,000. Explain if the two goods in question are substitute and complements.
- With the reference to your answer in part (a), suppose you are asked as a manager of traveling company to ensure maximum revenue generation for your firm in Turkey. Justify how you would increase the firm revenues.
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