The Burrito Barn is considering a price reduction on the Firegut Burrito, which currently sells for the price of $5.00. Giuseppe, the proprietor of Burrito Barn, knows the price elasticity for the Firegut is roughly equal to -2.3 over the range being considered for the price change. The Firegut has been selling at the brisk pace of 500 burritos per week. To increase market share, Giuseppe would like to increase sales to 750 per week. What price should Giuseppe set?
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- According to the previous discussion, what factors influence the price elasticity of demand for cigarettes? What other factors not mentioned in the article might influence the price elasticity of demand for cigarettes?Suppose that your demand schedule for DVDs is as follows: Price Quantity Demanded (income = 10,000) Quantity Demanded (income = 12,000) 8 40 DVDs 50 DVDs 10 32 45 12 24 30 14 16 20 16 8 12 a. Use the midpoint method to calculate your price elasticity of demand as the price of DVDs increases from 8 to 10 if (i) your income is 10,000 and (ii) your income is 12,000. b. Calculate your income elasticity of demand as your income increases from 10,000 to 12,000 if (i) the price is 12 and (ii) the price is 16.you sell twi different goods : printer and toner catridges. the price elasticity of demand for the printer is -3.4, and you earn a revenue of Rm15000 per month from the good. you earn a revenue of Rm5000 per month from the toner catridges. the cross price elasticity of demand for both of the goods is -2.5. if you decide to decrease the price of the printer by 5%, calculate your new total revenue for both of the goods.
- Creative Homework/Short Project Assume that you arean entrepreneur who runs a bakery that sells glutenfree breads and cakes. You believe that the currenteconomic conditions merit an increase in the price ofyour baked goods. You are concerned, however, thatincreasing the price might not be profitable becauseyou are unsure of the price elasticity of demand for yourproducts. Develop a plan for the measurement of priceelasticity of demand for your products. What findingswould lead you to increase the price? What findingswould cause you to rethink the decision to increaseprices? Develop a presentation for your class outlining(1) the concept of elasticity of demand, (2) why raisingprices without understanding the elasticity would bea bad move, (3) your recommendations for measurement, and (4) the potential impact on profits for elasticand inelastic demandIn 2003, when music downloading first took off, Universal Music slashed the average price of a CD from $21 to $15. The company expected the price cut to boost the quantity of CDs sold by 30 percent, other things remaining the same. What was Universal Music’s estimate of the price elasticity of demand for CDs? If you were making the pricing decision at Universal Music, what would be your pricing decision? Explain your decision.Typed and correct answer please. I ll rate24. The seafood restaurant you manage has daily specials. You have observed that the fresh salmon is overstocked and you want to increase salmon sales by 30%. You know the price elasticity of demand for salmon is -1.2. How much (and in what direction) should you change salmon prices to increase sales by 30%? Will this increase or decrease total salmon revenue? How do you know? You also know that fresh salmon and fresh tuna have a cross price elasticity of +.5. With the percentage decrease in salmon prices calculated above, how much more/less fresh tuna will you sell? Are salmon and tuna complements or substitutes at your restaurant?
- 6. Al's Appliancemart has market power in selling refrigerators. He just got in a shipment of undamaged refrigerators. Al has determined that there are two different types of buyers. One group are high demanders who have a more inelastic demand but tend to be picky about how nice their appliances look (they won't buy a dented one). Other buyers, low demanders, have a relatively more elastic demand, but also don't mind having a refrigerator with some dents. He pays $600 for each refrigerator from his supplier. 3/3 He has calculated that the high and low demander demand functions follows: Low: P = 1,000-0.5QL (QL = 2,000 - 2P) High: P = 1,600 - QH (QH = 1,600 – P) How much profit could Al earn if he sells them as is? How many should he add dents to (with a hammer) in order to maximize profit? What price would he then put on the non-dented and the dented refrigerators and how many would he sell of each? What would his profit then be?Please refer to the table below Price of iPhones. $700.00 $650.00 $500.00 $450.00 $300.00 $275.00 $250.00 $100.00 $50.00 Christy's Demand OA) 5 OB) 8 OC) 28 OD) 45 0 1 1 2 4 5 6 7 10 Lori's Demand. 0 0 1 2 3 4 4 5 Assume that the market for iPhone has only two consumers: Christy and Lori. According the table above, if the price of an iPhone is $275, the market will demand iPhones.Joe's Pig Palace sells barbecue plates for $4.50 each, and serves an average of 525 customers per week. During a recent promotion, Joe cut his price to $3.50 and observed an increase in sales to 600 plates per week. a. Calculate Joe's arc price elasticity of demand. b. Joe is considering permanently lowering his price to $4.00 to increase revenue. How many plates should Joe expect to sell at the new price? Does the move make sense in the light of Joe's desire to increase revenue?
- You want to estimate the price elasticity of demand for sandwiches at the restaurant you manage. In August, you charged $6.50 per sandwich and sold 500 sandwiches. In September, you charged $6 per sandwich and sold 581 sandwiches. You believe that no factors other than the price of your sandwiches have significantly influenced or will influence the demand for them. Question 12 O Important Homework Answered In the scenario above, what is the absolute value of the price elasticity of demand for your sandwiches? Type your numeric answer and submit Cannot be emptyA firm derives revenue from two sources: goods X and Y. Annual revenues from good X and Y are $10,000 and $20,000, respectively. If the price elasticity of demand for good X is -4.0 and the cross-price elasticity of demand between Y and X is 2.0, then a 2 percent decrease in the price of X will: decrease total revenues from X and Y by $200. O leave total revenues from X and Y unchanged. increase total revenues from X and Y by $520. decrease total revenues for X and Y by $600.Q1. The following table is a demand schedule for a particular commodity, betweenwhich price range is demand elastic? Explain your answer. Hint: At least three calculations, a reduction from K10 000.00 to K9 000.00, K7 000.00 to K6 000.00 and from K5 000.00 to K4 000.00. Price (K’000s Quantity Demanded10 09 10 8 207 306 405 504 603 702 801 900 100What do you understand by the term “income elasticity of demand”?Why should a firm pursuing long term growth be interested in the income elasticity ofdemand of its products?