Price elasticity of demand, Managerial Economics

Assignment Help:

For some time, two firms have charged $0.90 per standard unit of crating materials for shipping a particular type of machine tool and each has been selling about 20,000 units per month.  Last month, U-Pak-It reduced its price to $0.80 per unit and its volume increased to 25,000 units.  During that month, Boxit (the other company) maintained its price at $0.90 but saw its volume decline to 17,000 units.

a. What is the price elasticity of demand facing U-Pak-It?

b. What is Boxit's cross-price elasticity of demand for U-Pak-It price changes?

c.  If the price elasticity of demand for Boxit is the same as that for U-Pak-It, what price reduction for Boxit would be required to increase its monthly volume back to 20,000 units per month?


Related Discussions:- Price elasticity of demand

Difficulties in using fiscal policy, Difficulties in using fiscal policy ...

Difficulties in using fiscal policy There are several problems involved in implementing fiscal policy.  They include: Theoretical problems Monetarists and the Keynesia

Location problem in the plane, Location problem in the plane: In Kent, ...

Location problem in the plane: In Kent, the council to respond to the people and government needs, it decided to establish 3 community care homes. The towns are recorded with t

Identity economics, McDonalds has been operating in many Asian countries su...

McDonalds has been operating in many Asian countries such as China, Singapore and Japan. However, McDonalds has yet to open its ?rst restaurant in Vietnam, a country with over 80 m

Special drawing rights, Special Drawing Rights (SDR) These are interna...

Special Drawing Rights (SDR) These are international reserve currencies created by the International Monetary Fund  (IMF) to overcome the problems of using gold and national c

Production planning in demand forecast period, Q. Production Planning in de...

Q. Production Planning in demand forecast period ? Long term production planning can assist the management in organising long term finances on practical terms and conditions. S

Economics for accountants, Economics for Accountants A few teachers an...

Economics for Accountants A few teachers and some students have questioned the rationale for including economics in a course of study for professional accountants. In order to

Consumption function, The Consumption Function The consumption functio...

The Consumption Function The consumption function is the relationship  [expressed in mathematical or diagrammatic form] between planned consumption and other independent varia

Managerial Economics helps create utility for the Society. , Managerial Eco...

Managerial Economics helps create utility for the Society.

Volatility of the stock market, You have been provided with daily data star...

You have been provided with daily data starting in January 2009 on the main New Zealand stock market index, the NSX-50. Choose a suitable model for measuring volatility on the New

Central bank functions-lender of last resort, Lender of Last Resort The...

Lender of Last Resort The central bank also acts as the lender of last resort. Historically, this function developed out of the special position of the central banks. The centr

Write Your Message!

Captcha
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