Determine the coefficient of price elasticity of demand for

Assignment Help Business Management

Reference no: EM13369032

Determine the coefficient of price elasticity of demand for a local restaurant

The marketing team for a restaurant wants to determine the price elasticity of demand coefficient for its steak dinner.
It priced its dinner at different price points in local restaurants to see how many would be sold at different prices. The following is the result of the price trials:

Price Quantity
$5 15000
$8 18000

The formula for calculating the coefficient of the price elasticity of demand is:

Percent change in qty / percent change in price (midpoint formula).
Remember to use your rules of algebra when calculating this problem.
Calculations in parentheses first.
Divisions and multiplication next
Addition and substraction last.

[(Q Demand (new) - Q Demand (old)]/ [Q Demand (old) +Q Demand (new)]*2
[Price (new) - Price (old)]/ [Price (old) +Price (new)]*2

What is the coefficient?

Does this indicate that the meals are price elastic or inelastic?

Reference no: EM13369032

Questions Cloud

The girl the ferryboat captain and the hermitsquestions1 : the girl the ferryboat captain and the hermitsquestions1. list in order the characters in this story that you like from

Building alarm floor planphysical security draw a facility : building alarm floor planphysical security. draw a facility floor plansubmit a drawing as close to scale as possible of

Explain how through the use management information systems : explain how through the use management information systems the competitors of a company benefit when your company uses

Many employers facing industry job shifts also are : many employers facing industry job shifts also are confronted by workforce changes due to retirement of key executives

Determine the coefficient of price elasticity of demand for : determine the coefficient of price elasticity of demand for a local restaurantthe marketing team for a restaurant wants

Important information about goals of financial : important information about goals of financial managementshareholders wealth maximizationthe goal of the firm and

National cultures and organizationearly research on the : national cultures and organizationearly research on the influence of cultural conditioning on collective human

Trompenaars researchtrompenaars 1993 found seven dimensions : trompenaars researchtrompenaars 1993 found seven dimensions - concerned with what people do individualism time and

Negotiation stylesan in-depth look at negotiating as a : negotiation stylesan in-depth look at negotiating as a basic tool of management aspects of different negotiating styles

User Account

All Pages