Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Macroeconomics Expert

Problem:

The Stopdecay Company sells the electric toothbrush for $25. Its sales have aver-aged 8,000 units per month over precedent year. Freshly, its closest competitor, Decayfighter, decreased the price of its electric toothbrush from $35 to $30. Consequently, Stopdecay’s sales are declined by 1,500 units per month.

Required:

a. What is the arc cross elasticity of the demand between Stopdecay’s toothbrush and Decayfighter’s toothbrush? What does this indicate about the relation-ship between the two products?

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

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

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

Macroeconomics, Economics

  • Category:- Macroeconomics
  • Reference No.:- M914043

Have any Question? 


Related Questions in Macroeconomics

Assignment multiyear plans and analysisfor assignments you

Assignment: Multiyear Plans and Analysis For Assignments you are the new budgeting and finance administrator for your local government agency. Your first responsibility is to become familiar with the agency, the budget, ...

Assume that the consumption schedule for a private open

Assume that the consumption schedule for a private open economy is such that consumption C = 20 + 0.80Y. Assume further that planned investment Ig and net exports Xn are independent of the level of real GDP and constant ...

To get you started concentrate on two distinct chapters in

To get you started concentrate on two distinct chapters in the Schiller textbook. See chapter 4 for an analysis of the problems of individual markets. See chapter 10 for an analysis of problems in the aggregation of mark ...

Discuss structural cyclical frictional and natural

Discuss structural, cyclical, frictional, and natural unemployment. What fiscal and monetary policies are appropriate to fight unemployment? What type of unemployment will be affected most by these policies? Why? Which w ...

Some places limit the number of hours that alcohol can be

Some places limit the number of hours that alcohol can be sold on Sunday. Is it possible that this sales restriction could help liquor stores? Use game theory to construct your answer. Hint: even without restrictions on ...

1 suppose you are hired to manage a small manufacturing

1. Suppose you are hired to manage a small manufacturing facility that produces Widgets. (Part A) You know that you are operating in a monopolistically competitive market, that is, you are a small part of a large market ...

Explain the implications of marginal cost pricing and

Explain the implications of marginal cost pricing and average cost pricing. Why are these important results in a purely competitive industry? Explain.

Need the answer in 150 wordswhat is currency overshooting

Need the answer in 150 words. What is currency overshooting? Using an example of a permanent decrease in money supply, explain with the help of graphs, how the money market and forex market respond to the change in the s ...

Consider vosburg v putney an 1891 wisconsin case putney

Consider Vosburg v. Putney, an 1891 Wisconsin case. Putney, age 11, kicked Vosburg, age 14, in the leg during school. The kick was not very hard - the jury found that "defendant, in touching the plaintiff with his foot, ...

When the money supply increases it could lead to various

When the money supply increases, it could lead to various effects upon the demand for and supply of loanable funds, and thus the market interest rate. Which effect is consistent with an  increase  in demand for loanable ...

  • 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