Calculate point price elasticities of demand for each, Ask an Expert

Economics

Q. Coke
PL -$0.0005QL= $40
MRL = TRL/ QL = $40 - $0.001QL
Pepsi
PT = $50 - $0.0004QT
MRT = TRT/ QT = $50 - $0.0008QT

Average variable costs for labour and materials are constant at $20 per unit.

1. Calculate profit-maximizing price, output and total profit contribution levels.

2. Calculate point price elasticities of demand for each customer product at activity levels identified in part A.

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M9307630

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