Illustrate what is the effect of the price increase on, Ask an Expert

Economics

Q. Elasticity

Ruben's sells fish tacos also other lunchtime food near university campuses. Currently, the price of a Bottom Feeder Taco is $1.40 also daily sales at the YSU campus store is 55 tacos. A price increase to $1.80 reduces daily sales to 45 tacos.

a. Illustrate what is the effect of the price increase on revenue at the YSU campus store?

b. Calculate the price elasticity of demand for Bottom Feeder Tacos using the mid-point formula.

c. Another Ruben's store is located on the ZSU campus. The students/customers from ZSU are nearly identical to those from YSU, but their income is 15% higher. When Bottom Feeder Tacos are priced at $1.80, daily sales at the ZSU store are 51 tacos. Are Bottom Feeder Tacos a normal good? Calculate the income elasticity of demand for Bottom Feeder Tacos using the mid-point formula.

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M9162625

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