Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Business Economics Expert

Calculating own price, income and cross-price elasticities

A book publisher has the following demand function for the firm's novels (Qx):
Qx = 12,000-5,000Px + 5I + 500Pc
where Px is the price charged for the firm's novels, I is income per Capita, and Pc is the price of books from competing publishers.
Assume that the initial values of Px, I, and Pc are $5, $10,000, and $6, respectively

(A) find out the price elasticity and determine what effect a marginal (small) price increase from the initial price would have on total revenues?

(B) find out the income elasticity and evaluate how sale of the novels would change during a period of rising incomes?

(C) find out the cross elasticity and assess the probable impact if competing publishes raise.

 

Business Economics, Economics

  • Category:- Business Economics
  • Reference No.:- M925604

Have any Question? 


Related Questions in Business Economics

A state the law of supplyquantity supplied rises as price

a. State the law of supply. Quantity supplied rises as price increases, other things constant. Quantity supplied falls as price decreases, other things constant. Supply increases as price falls. Supply decreases as price ...

Fiscal policy please respond to the following who is in

Fiscal Policy" Please respond to the following: Who is in charge of making fiscal policy? Determine what fiscal policy measure has a more direct impact to the economy. Is it an increase in government spending or an equal ...

A monopolistrsquos inverse demand function is p 150 ndash

A monopolist’s inverse demand function is P = 150 – 3Q. The company produces output at two facilities; the marginal cost of producing at facility 1 is MC1(Q1) = 6Q1, and the marginal cost of producing at facility 2 is MC ...

Suggest three 3 strategies that a public leader could use

Suggest three (3) strategies that a public leader could use in order to do the following: persuade other governmental departments to work collaboratively to reduce financial burdens, increase sufficiency in the delivery ...

As you mentioned illegal conduct trading refers usually

As you mentioned "Illegal conduct trading refers usually selling and buying stocks, in breach of relationship trust and confidence or fiduciary duty, non public information about the security include tipping." Any real e ...

Is it better to control employees access to the internet by

Is it better to control employees' access to the Internet by blocking certain sites, and monitoring employee usage of computing resources, or to measure an employee’s performance in terms of productivity? What are possib ...

Writing an essay that answers following questions real

Writing an essay that answers following questions: Real Estate Market + economy (800 words). 1. What is Real estate market? Explaining UK Real Estate Market? 2. Why investors pay attention to Real Estate Market? 3. What ...

The first requirement is to list all of the components that

The first requirement is to list all of the components that are present in your network, to describe which components must be monitored, and to identify the security requirements of each monitored component. Your manager ...

Oligopolistic models are based on behavioral assumptions

Oligopolistic models are based on behavioral assumptions. One behavioral assumption associated with differentiated product markets is that price increases will not be matched, but price decreases will be matched. This vi ...

The worlds price of zinc had increase to the point where

The worlds price of zinc had increase to the point where mothballed zinc mines in east Tennessee have been reopened because of their potential profitability. What is estimated annual profit for a mine producing 20,000 to ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

A cola-dispensing machine is set to dispense 9 ounces of

A cola-dispensing machine is set to dispense 9 ounces of cola per cup, with a standard deviation of 1.0 ounce. The manuf

What is marketingbullwhat is marketing think back to your

What is Marketing? • "What is marketing"? Think back to your impressions before you started this class versus how you

Question -your client david smith runs a small it

QUESTION - Your client, David Smith runs a small IT consulting business specialising in computer software and techno

Inspection of a random sample of 22 aircraft showed that 15

Inspection of a random sample of 22 aircraft showed that 15 needed repairs to fix a wiring problem that might compromise

Effective hrmquestionhow can an effective hrm system help

Effective HRM Question How can an effective HRM system help facilitate the achievement of an organization's strate