MICROECONOMICS + CONNECT PLUS ACCESS
21st Edition
ISBN: 9781260210675
Author: McConnell
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 6, Problem 3RQ
Calculate total-revenue data from the
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Ma1.
Which of the following statements are true about revenue? Select all that apply: Responses Revenue is price times quantity Revenue is price times quantity The total revenue obtained from selling a particular item can be found by adding the total profits for that item to its total cost. The total revenue obtained from selling a particular item can be found by adding the total profits for that item to its total cost. To maximize revenue set the elasticity equation E(p)=1 To maximize revenue set the elasticity equation E(p)=1 If the demand of a commodity is elastic, then raising the value of that commodity will increase the revenue for the commodity. If the demand of a commodity is elastic, then raising the value of that commodity will increase the revenue for the commodity.
- (Price Elasticity and Total Revenue) Fill in the blanks for each price-quantity combination listed in the following table. Now graph this relationship, making sure to label each axis. What relationship have you depicted?
P Q Price Elasticity Total Revenue
9 1 9
8 2 16
7 3 21
6 4 24
5 5 25
4 6 24
3 7 21
2 8 16
Use the table below to complete the following exercise. Plot the price and quantity data. Indicate the price elasticity value at each price. What happens to the elasticity value as you move down the demand curve?
Price $
% Change in Price
Quantity Demanded
% Change in Quantity
5
100
10
100
80
220
15
66
60
225
20
33
40
233
25
25
20
250
30
30
0
2100
b. Below the demand curve plotted in (a), plot the total-revenue curve, measuring total revenue onthe vertical axis and quantity on the horizontal axis
C. Using the data in (b), what would a 10 percent increase in the price of movie tickets mean for the revenue of a movie theatre if the price elasticity of demand was, in turn, -0.1, -0.5, -1.0 and 5.0?
Chapter 6 Solutions
MICROECONOMICS + CONNECT PLUS ACCESS
Ch. 6 - Explain why the choice between 1, 2, 3, 4, 5, 6,...Ch. 6 - Prob. 2DQCh. 6 - The income elasticities of demand for movies,...Ch. 6 - Research has found that an increase in the price...Ch. 6 - Prob. 5DQCh. 6 - Suppose that the total revenue received by a...Ch. 6 - Suppose that the total revenue received by a...Ch. 6 - Calculate total-revenue data from the demand...Ch. 6 - Prob. 4RQCh. 6 - 5. In 2006, Willem de Kooning’s abstract painting...
Ch. 6 - Suppose the cross elasticity of demand for...Ch. 6 - Look at the demand curve in Figure 6.2a. Use the...Ch. 6 - Prob. 2PCh. 6 - Graph the accompanying demand data, and then use...Ch. 6 - Danny Dimes Donahue is a neighborhoods 9-year-old...Ch. 6 - What is the formula for measuring the price...Ch. 6 - ADVANCED ANALYSIS Currently, at a price of 1 each,...Ch. 6 - Prob. 7P
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Similar questions
- Calculate the total revenue for each level of demand and post into the below table: Figure 1: The Demand Schedule for Barbeque Dinners Price Quantity Demanded Total Revenue Elasticity Coefficient Elastic or Inelastic $4 100 __________ XXXX XXXX 6 80 __________ __________ __________ 8 60 __________ __________ __________ 10 40 __________ __________ __________ 12 20 __________ __________ __________ 14 1 __________ __________ __________ Using the midpoints formula presented, calculate the price elasticity of Demand coefficient for each price levels, starting with the coefficient for the $4 to $6 level. For each coefficient, indicate each type of elasticity: elastic demand, inelastic demand, or unitary demand. Post your answers into the table, Figure 1.arrow_forward100 PRICE 90 80 70 60 50 40 30 20 10 Demand 5 10 15 20 25 30 35 40 45 50 QUANTITY Refer to Figure 5-3. Using the midpoint method, between prices of $70 and $80, price elasticity of demand is about O a. 0.40. Ob.0.13. O c. 3.00 O d. 0.33.arrow_forwardAssume the following demand function for Mango Juice: QD = 40-2P a. What is the price elasticity of demand between the price of juice between $10 per unit and $8 per unit? b. What is the value of total revenue and marginal revenue when the price is $10 per unit and the price is $8 per unit? Is demand elastic, unit elastic or inelastic at that price level? c. Assume that the marginal revenue (MR) equation associated with this demand curve is MR= 20-Q .At what quantity level the demand will be unit elastic? Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.arrow_forward
- ONLY ANSWER QUESTION #2 1. Online the timing and tailoring of prices to specific models of products is the key to successful pricing in online markets. And “Thanks to the ready availability of data in online markets, a pricing manager can easily approximate the elasticity of demands for the different products it sells online.”Assuming a 10 percent decrease in price increases sales by 28 percent, calculate the price elasticity of demand? If the wholesale price of the online product is $50 and sells at a price comparison site that charges $.50 per click and boasts a conversion rate of 5 percent (an average of 20 clicks are needed to generate a sale). What price should you charge for the product? What is the optimal markup on cost? 2. The authors assert that price sensitivity is affected by (1) product life cycles, and (2) numbers of competitors. In fact, “when the number of competing sellers doubles, a firm’s elasticity of demand is expected to double (and you should be able to verify…arrow_forward1. Suppose for some firm, 14 units were sold at the initial price of $33 and after the price rose, 10 units were sold at the new price of $39. Compute the price elasticity of demand and interpret the result. 2. Returning to your computation in #1, will revenue have increased or decreased as a result of that price change? On the basis of this information do we know enough to assess whether the price change was a wise decision for the firm? Explain. 3. Ben purchased 12 gallons of gasoline each day. When the price of gasoline was $2.80 per gallon, Ben purchased 12 gallons of gasoline. When the price of gasoline fell to $2.10 per gallon, Ben purchased 12 gallons of gasoline. Use price elasticity of demand to describe Ben’s demand for gasoline. What does Ben’s demand curve for gasoline look like?arrow_forward**Asking for part (d) only** Suppose the demand for crossing the Golden Gate Bridge is given by Q = 10,000 − 1,000P. (LO6) a. If the toll (P) is $3, how much revenue is collected? b. What is the price elasticity of demand at this point? c. Could the bridge authorities increase their revenues by changing their price? d. In 2019, the San Francisco Bay area Water Emer- gency Transportation Authority (WETA) announced it was considering the implementation of hovercraft service as a supplement to existing ferries. Suppose that a fast hovercraft alternative to the Golden Gate Bridge is implemented between Marin County and San Francisco. How would the new service affect the elasticity of demand for trips across the Golden Gate Bridge?arrow_forward
- Suppose that the management of Sun City resort is trying to understand the income elasticity of their resort. As an advisor, they provide you with the following figures;If the average income of visitors is R3 000 (which is the current income), then 45 000 visitors visit Sun City resort each year and if the average income increases to R5 000, then 60 000 visitors visit Sun City resort each year. 1. Calculate the income elasticity of demand using the arc method. (5) 2. Based on your answer above (1), explain what type of a product (service) the resort is.arrow_forwardSuppose ABC Travels is considering an increase in fares. If doing so results in an increase in revenues raised, which of the following could be the value of the own price elasticity of demand for its travel O a. 0.5 O b. 1.0 O c. 1.5 d. 2arrow_forwardYou are the manager of a firm that receive revenue of Rs.30,000 per year from product X and Rs. 70,000 per year from product Y. The own price elasticity of demand for product X is -2.5 and the cross price elasticity of demand between product Y and X is 1.1. How much will you firm’s total revenue (revenues from both products) change if you increase the price of good X by 1 present?arrow_forward
- Refer to the attached Figure Section 2 Midterm 1 Graph 2. What is the price elasticity of demand from point B to point C. usling the midpoint method? Section 2 Midterm 1 Graph 2 daox O A. 1.00 O B. 0.50 O C. 0.75 O D. 1.30 Reset Selectionarrow_forwardSuppose, the price of a product decreased from R.O 20 to 17. As a result, the products demand increased from 100 to 180 units. Determine the price elasticity of demand for the product. a. 3.55 b. 5.33 c. 2.88 d. 4.66arrow_forwardThe demand curve for a product is given by 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?Instruction: Enter your response rounded to two decimal places.Own price elasticity: Demand is: inelastic or elastic ?If the firm prices below $140, revenue will: decrease or not change or increase ?b. What is the own price elasticity of demand when Px = $240? Is demand elastic or inelastic at this price? What would happen to the firm’s revenue if it decided to charge a price above $240?Instruction: Enter your response rounded to one decimal place.Own price elasticity: Demand is: elastic or inelastic ?If the firm prices above $240, revenue will: not change or decrease or increase ?c. What is the cross-price elasticity of demand between good X and good Z when Px = $140? Are goods X and Z substitutes…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Microeconomics: Principles & PolicyEconomicsISBN:9781337794992Author:William J. Baumol, Alan S. Blinder, John L. SolowPublisher:Cengage Learning
Exploring EconomicsEconomicsISBN:9781544336329Author:Robert L. SextonPublisher:SAGE Publications, Inc
Microeconomics: Principles & Policy
Economics
ISBN:9781337794992
Author:William J. Baumol, Alan S. Blinder, John L. Solow
Publisher:Cengage Learning
Exploring Economics
Economics
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:SAGE Publications, Inc
How To Understand Elasticity (Economics); Author: Market Power;https://www.youtube.com/watch?v=1XXhpHJTglg;License: Standard Youtube License