Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Microeconomics Expert

The Stopdecay Company sells an electric toothbrush for $25. Its sales have averaged 8,000 units per month over the past year. Recently, its closest competitor, Decayfighter, reduced the price of its electric toothbrush from $35 to $30. As a result, Stopdecay's sales declined by 1,500 units per month.

a. What is the arc cross elasticity of demand between Stopdecay's toothbrush and Decayfighter's toothbrush? What does this indicate about the relationship between the two products?

b. If Stopdecay knows that the arc price elasticity of demand for its toothbrush is -1.5, what price would Stopdecay have to charge to sell the same number of units as it did before the Decayfighter price cut? Assume that Decayfighter holds the price of its toothbrush constant at $30.

c. What is Stopdecay's average monthly total revenue from the sale of electrictoothbrushes before and after the price change determined in part (b)?

d. Is the result in part (c) necessarily desirable? What other factors would have to be taken into consideration?

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M939882

Have any Question? 


Related Questions in Microeconomics

Need someone to help with the belowthe theory of market

Need someone to help with the below The theory of market economies emphasizes freedom of choice and limited government intervention. The classic argument for government intervention is market failure - the inability of t ...

Economic term paperempirical project the research project

Economic Term Paper Empirical Project The research project should be about 10 pages and should explain your data collection, model, and findings. The project (due by the final exam date) is worth 30% of your final grade. ...

Assignmentinstructions the topic of the research paper will

Assignment Instructions: The topic of the research paper will be any disease or condition of the body. The paper must include a thorough description of the disease/condition; current statistics of those affected - epidem ...

Suppose the economy was at equilibrium before the start of

Suppose the economy was at equilibrium before the start of the recession. Show this using the IS-LM, Keynesian cross, AD-SRAS-LRAS and money market spaces. Following the start of the recession, what happened to aggregate ...

Create the demand and supply of the labor market and demand

Create the demand and supply of the labor market and demand and supply of the goods market using the production function and consumption utility function given. Solving the equations and graphing the models have to be th ...

1 this question is for discussion in teamsas the semester

1. This question is for discussion in teams. As the semester progresses. we will discuss these issues in class. Visit The World Factbook at https://www.cia.govlibrarypublications:The-world-factbook'. In "Please select a ...

The economy is full employment now the government wants to

The economy is full employment. Now the government wants to change the composition of demand toward investment and away from consumption without, however, allowing aggregate demand to beyond full employment. What is requ ...

Assignment multiyear plans and Assignment: Multiyear Plans and Analysis Preparation •

Assignment: Multiyear Plans and Analysis Preparation • Review the document titled "City of Charlottesville 2010 Annual Comprehensive Plan" located in the course shell. Write a three to four (3-4) page paper in which you: ...

Assignmentpart idirections read the prompts below and

Assignment PART I Directions: Read the prompts below and formulate a response of at least one half of one page in length for each question. Please show Your references on a reference page 1. Explain records checks. List ...

Desserts by jb case studyjay brown jb to his friends is a

Desserts by J.B Case Study Jay Brown (J.B. to his friends) is a student at the North-west Culinary Institute and specializes in preparing elab-orate desserts. After graduation. J.B. wants to open up a bakery. The bakery. ...

  • 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

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro