What is the formula for calculating the price elasticity of demand using the midpoint method (this equation should involve Q, and Q₂, P₁ and P₂) (It is okay to include the x100% on the top and bottom parts if you would like.) For a particular video game, the company sells 160 (thousand) copies of the game when the price of the game is $55. However, when they change the price to $45, the company sells 240 (thousand) copies of the game. a. As part of the process of finding the price elasticity of demand, what is the percent change in quantity using the midpoint method? Round your answer to 4 decimal places if necessary.

What is the formula for calculating the price elasticity of demand using the midpoint method (this equation should involve Q, and Q₂, P₁ and P₂) (It is okay to include the x100% on the top and bottom parts if you would like.) For a particular video game, the company sells 160 (thousand) copies of the game when the price of the game is $55. However, when they change the price to $45, the company sells 240 (thousand) copies of the game. a. As part of the process of finding the price elasticity of demand, what is the percent change in quantity using the midpoint method? Round your answer to 4 decimal places if necessary.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter3: Demand Analysis

Section: Chapter Questions

Problem 8E: The Stopdecay Company sells an electric toothbrush for $25. Its sales have averaged 8,000 units per...

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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?
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