The price of a product is 5 and the quantity demanded is, Ask an Expert

Economics

The price of a product is $5 and the quantity demanded is 250 units/week. When the price is increased to $7 the quantity demanded falls to 125.

a. Calculate the percent change in price and percent change in quantity demanded.

b. Calculate the price elasticity of demand using the arc and midpoint formula. Explain what this describes (ex. for every 1% change in price....)

c. Describe the price elasticity of demand (elastic, inelastic)

d. Describe whether the pricing decision was correct assuming the firm desires to maximize total revenue.

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M91953983

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