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Elasticity of the price elasticity of demand

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At the price of $400 per hour the demand for Ms. Lawmanne legal services is, on average, 8 clients (cases) per month, which requires 320 billable hours.

a. Determine the monthly revenue of the Lawmanne law firm

Now suppose Ms. Lawmanne decides to lower her fee to $350 per hour. This price reductionincreases the average number of her monthly clients (cases) to 8.5 requiring 340 billable hours.

b. What would be Ms. Lawmanne's monthly revenue at thislowerprice?

c. Calculate the straight (not midpoint) price elasticity of demand for Ms. Lawmanne's services.

d. Is demand for Ms. Lawmanne's services elastic, inelastic, or unit elastic?

e. Ms. Lawmanne's expected the reduction in her feeto increase her monthly revenue to $140,000. What did she assume the (strait) price elasticity of the demand for her services to be?

f. Now calculate theactualarc(midpoint)elasticity of the price elasticity of demand for Ms. Lawmanne's legal services

Reference no: EM132256587

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