What is the point price elasticity of demand

Assignment Help Business Economics
Reference no: EM133063320

QUESTION: Copy and paste the following data into Excel:

P

Q

$95.00

2855

$91.20

3024

$90.25

3119

$89.30

3179

$86.45

3239

$85.50

3332

$82.65

3386

$78.85

3423

a. Run OLS to determine the demand function as P = f(Q); how much confidence do you have in this estimated equation? Use algebra to invert the demand function to Q = f(P).

b. Using calculus to determine dQ/dP, construct a column which calculates the point-price elasticity for each (P,Q) combination.

c. What is the point price elasticity of demand when P=$90.25? What is the point price elasticity of demand when P=$79.00?

d. To maximize total revenue, what would you recommend if the company was currently charging P=$89.30? If it was charging P=$79.00?

e. Use your first demand function to determine an equation for TR and MR as a function of Q, and create a graph of P and MR on the vertical and Q on the horizontal axis.

f. What is the total-revenue maximizing price and quantity, and how much revenue is earned there? (Round your price to the nearest cent, your quantity to the nearest whole unit, and your TR to the nearest dollar.) Compare that to the TR when P = $90.25 and P = $79.00.

Reference no: EM133063320

Questions Cloud

Type of demand for netflix subscriptions : Based on this information, what is the type of demand for Netflix subscriptions? Give reasons.
Determine the variable cost per unit : The manufacturing costs of Mocha Industries for three months of the year are as follows: Determine the variable cost per unit
Calculate the deadweight loss of the monopoly : The demand for milk and the total costs of dairy production are specified by the following:
Calculate economic growth rate in 2013 : 1. Assume that apples cost $1.50 in 2012 and $1 in 2013, whereas oranges cost $1 in 2012 and $2.50 in 2013. If 4 apples were produced in 2012 and 5 in 2013, whe
What is the point price elasticity of demand : QUESTION: Copy and paste the following data into Excel:
Describe four public health issues : -Describe four public health issues that negatively impacted the Digging of the Panama Canal. Discuss how these issues were overcome.
Compute the amount of the monthly payments on the loan : BarLey Inc. recently borrowed $125,000 from its bank at an annual interest rate of 12 percent. Compute the amount of the monthly payments on the loan
Compute the one-year usd return on investment : Suppose an investment fund manager considers investing $10,000,000 either in one-year (1Y) US Treasury note or in a corresponding UK Government one-year bond (U
Increase the average household income : What strategies can a government create to increase the average household income in any region? (This is pointed towards labor economics and the economic wage d

Reviews

Write a Review

Business Economics Questions & Answers

  Economics assignment

This document contains various important questions and their appropriate answers in the subject field of Economics.

  Demand and supply curves

Economics is the study of the principles governing the allocation of scarce means among competing ends when the objective of the allocation is to maximize the attainment of the ends.

  Long-run perfectly competitive equilibrium for the firm

Evaluate Government intervene and correct this situation?(a) Explain the concept of a concentration ratio. A rise in the price of magarine Explain the impact of external costs and external benefits on resource allocation long-run perfectly c..

  Supply and demand diagrams

Explain each of the following using supply and demand diagrams,  With the use of a graph, explain how these two programs affect cigarette consumption and the price of cigarettes.

  Case study: fisher-price toys

The case study of the Fisher-Price Toys, Inc., a popular case in basic economics and management from the prestigious Harvard Business School.

  Draw the production possibility curve

Draw the production possibility curve and a. Define consumer surplus and producer surplus.

  Tax revenue

The Australian government administers two programs that affect the market for cigarettes

  Maximize total welfare

How many tickets to sell to maximize total welfare.

  Difference between the cv and the ev

The change in consumer surplus (?CS) is not "theoretically" justifiable like the CV and EV but it continues to be the most widely used measure of consumer welfare change. Explain how this can be reconciled

  Depict von neumann-morgenstern utility index u in a diagram

Depict the von Neumann-Morgenstern utility index u in a diagram

  What is the market solution

What is the market solution (market price and quantity) and What is the total surplus of the society under the market solution

  Calculate gross national product and net national product

Calculate gross national product and net national product

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!

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