Ask Question, Ask an Expert

+61-413 786 465

info@mywordsolution.com

Ask Microeconomics Expert

The relationship between Price elasticity of demand and Marginal Revenue

Can be shown to be:     MR= P ( 1- (1/e))

There are two types of customers that come to the Barnegat Fish Company to have their signature crabcakes: An affluent group with a price elasticity of demand for crabcakes of e = ?2; and a less wealthy type with a price elasticity of demand for crabcakes of e = ?5. The restaurant wants to introduce a coupon to encourage more people to visit their restaurant. Thus every buyer pays the posted price of $P per crabcake but those who tender the coupon get a discount of $X off the posted price. If the Marginal Cost of a crabcake is $2.00, what is the price of the crabcakeand what is the value of the coupon?(Set MR=MC).

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M91235374

Have any Question?


Related Questions in Microeconomics

Question 1 do you think that the change in fuel consumption

Question: 1. Do you think that the change in fuel consumption can be attributed to the carbon tax?What other things do you think played a part in the change? 2. What are some good that are regulated by the free market? w ...

Question president trump has complained that the us trade

Question: President Trump has complained that the U.S. trade deficit is too large. Based on the uses-of-saving identity (S = 1 + NX), how could the U.S. trade deficit be reduced (what are the options)? Explain fully and ...

Question analyze the nominal and real concepts and apply

Question: Analyze the nominal and real concepts, and apply these concepts to Gross Domestic Product (GDP). Determine the elements that affect the reporting of the GDP. Compare and contrast the reporting of GDP in nominal ...

Question a when marginal cost is lower than average

Question: a. When marginal cost is lower than average variable cost, what is happening to average variable cost? When marginal cost is above average variable cost, what is happening to average variable cost? (Hint: look ...

Qestion in the market for corn the supply curve is qs -2

Question: In the market for corn the supply curve is QS = -2 + P and the demand curve is QD = 10 - P. Solve these for equilibrium price and quantity. Now assume that producers in Illinois grow 10 percent of that output. ...

Question when sulfur dioxide is emitted into the air it is

Question: When sulfur dioxide is emitted into the air it is transported over long distances and is converted to sulfuric acid. This gradually falls to the ground, either as ratio or snow simply by settling out of the air ...

Question 1 explain the logic underlying the law of one

Question: 1. Explain the logic underlying the law of one price and the theory of purchasing power parity. 2. How will a decrease in the federal goverment's budget deficit affect the equilibrium interest rate in the bond ...

Question 1 consider the rothschild-stiglitz adverse

Question: 1. Consider the Rothschild-Stiglitz adverse selection model that we discussed in the class. Suppose a competitive insurance company proposes an insurance policy that provides full insurance to all individuals, ...

Question a local business owner tells you economics is

Question: A local business owner tells you economics is wrong because people do not respond to incentives. She tells you that she increased all of her employees' pay by 10 percent and they did not work any harder. Is her ...

Question in the heckscher-ohlin model studied in the slides

Question: In the Heckscher-Ohlin model studied in the slides, suppose that K L = K* L* but preferences may be different between countries. Suppose that the home country has comparative advantages in food. In what country ...

  • 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

Why might a bank avoid the use of interest rate swaps even

Why might a bank avoid the use of interest rate swaps, even when the institution is exposed to significant interest rate

Describe the difference between zero coupon bonds and

Describe the difference between zero coupon bonds and coupon bonds. Under what conditions will a coupon bond sell at a p

Compute the present value of an annuity of 880 per year

Compute the present value of an annuity of $ 880 per year for 16 years, given a discount rate of 6 percent per annum. As

Compute the present value of an 1150 payment made in ten

Compute the present value of an $1,150 payment made in ten years when the discount rate is 12 percent. (Do not round int

Compute the present value of an annuity of 699 per year

Compute the present value of an annuity of $ 699 per year for 19 years, given a discount rate of 6 percent per annum. As