User Account

All Pages

What is the effect of a percent increase

Assignment Help Business Economics
Reference no: EM132786024

We are working on elasticity of demand. Consider a good whose price elasticity of demand equals -0.5.

a. What is the effect of a 10 percent increase in price on this good's quantity demanded? Is demand price elastic or price inelastic?

b. What is the effect of a 10 percent increase in price on the firm's total revenue (P x Q). You need a number here. Please explain the answer.

c. According to the law of demand, quantity demanded falls when price rises. What is the effect of the decrease in the total number of units produced on the firm's total costs (i.e., the amount of money the firm must pay its workers, suppliers, and other inputs), holding wages and input prices constant?

d. A firm's profit equals the difference between its revenue and costs. Based on your answers to parts (b) and (c) what is the effect of raising price on a firm's profit when it is operating where demand is price inelastic? Explain by discussing the effect of an increase in price, and concomitant decrease in the quantity produced, on the firm's revenue and costs.

e. I'm hired as a pricing analyst and discover that past price changes have had almost no effect on the number of units sold for one the products you manage. What changes, if any, would you make to the price of this product? Explain the answer and why the change proposed is expected to increase the firm's profit.

Reference no: EM132786024

Questions Cloud

Legal and ethical scenarios : Research the court system of YOUR state. Present a brief overview of the court system by identifying the courts and the types of cases they preside over.
Explain the physical consequence of the clinical issue : Develop a PowerPoint presentation of 15-18 slides, addressing clinical issues in the elderly and neglect and abuse of dependent adults and the elderly.
Calculate income tax by accepting empno : Calculate Income tax by accepting empno as a input. We assumed if Annual income is exceeded 500000 then employee incurred tax. Tax will be incurred on amount
Are any insights about the spirituality of group : Are there any insights about the spirituality of this group that you felt were missing from the text's consideration and that you would like to add for class
What is the effect of a percent increase : We are working on elasticity of demand. Consider a good whose price elasticity of demand equals -0.5.
Determine amount of over-or under applied factory overhead : Factory overhead is applied at the rate of $2.30 per direct labor hour. Determine amount of over-or under applied factory overhead
Calculate sue opportunity cost of producing a cap : In an hour, Sue can produce 40 caps or 4 jackets and Tessa can produce 80 caps or 4 jackets.
Discuss about persons with an arab heritage : Guide to Culturally Competent Health Care, about persons with an Arab Heritage, coupled with the accompanying video, what key points got raised for you?
Describe relationship between research and counseling : Research is important in the field of counseling and psychology because it can help us to understand the profession, shed light on the theories and concepts.

Reviews

Write a Review

Business Economics Questions & Answers

  Charge of fiscal policy

Assume you are in charge of fiscal policy. A slowdown in the economy occurs, and in an effort to try to stimulate the economy via expansionary fiscal policy

  The presence of so many commercial banks

The presence of so many commercial banks in the United States is most likely the result? of:

  Which one is considered unemployed

Which one is considered unemployed?

  Effect on the population variance

State whether each of the following will increase, decrease, or have no effect on the population variance.

  What is the fundamental economic purpose of property law

What is the fundamental economic purpose of property law? What is the Coase Theorem, and why is it important to the economic theory of property law?

  Annual operation and maintenance cost

Don Garlits is a landscaper. He is considering the purchase of a new commerical lawn mower, either the Atlas or the Zippy. Construct a choice table for interest rates from 0% to 100%.

  Can the two countries gain from trade

A Spanish can either produce 3 liters of win or 1 kilos of cheese. A Portuguese worker can either produce 4 litres of win or 12 kilos of cheese 1) Which countries have absolute advantages in which goods? Explain 2) Which countries have comparative ad..

  It wants to increase taxes so which the net change

Fearing inflation, it wants to increase taxes so which the net change in the equilibrium level of GDP is zero. By Elucidate how much taxes should be increased

  Value of consumer surplus and producer surplus

how consumer surplus and producer surplus in a figure and calculate the value of consumer surplus and producer surplus under the government policy.

  Problem deals with sales maximization

This problem deals with sales maximization the graph I cannot provide, however I do have my numbers

  How will this shift the aggregate demand curve

Frugal Consumers Suppose household become nervous about the future and decide to increase their savings and decrease their consumption spending. How will this shift the aggregate demand curve?

  How much will you pay in lodging taxes

The city of Touristburg has implemented a lodging tax equal to 2% of gross revenue at local hotels. If you stay in a hotel that costs $250 per night for 3 nights, how much will you pay in lodging taxes? The city of Touristburg estimates the annual gr..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd