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Consider jared super oat with ginseng

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Parsons-Ashworth Bread Company hire you as their economist.Your first task is to estimate the price elasticity of demand for different bread products (Brandon's Plain White and Jared's Super Oat with Ginseng).You find that Brandon's Plain White variety has an elasticity of 2.1 while Jared's Super Oat with Ginseng version has an elasticity of .8 (all in absolute values).Historically, the elasticities have been stable.

  1. Consider Jared's Super Oat with Ginseng: are you profit maximizing, or do you need more information (and if so, what information)? Explain your answer.
  2. Consider Brandon's Plain White: are you profit maximizing, or do you need more information (and if so, what information)? Explain your answer.
  3. To increase revenue for Jared's Super Oat with Ginseng, should you raise or lower the price of your product or do you need more information (and if so, what information)? Explain your answer.
  4. To increase revenue for Brandon's Plain White, should you raise or lower the price of your product or do you need more information (and if so, what information)? Explain your answer.

Reference no: EM131602602

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