Below is the price and quantity information a firm. For example, at a price of $2.80,...
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Below is the price and quantity information a firm. For example, at a price of $2.80, 60 units are sold. P₁ = 3.20 Q₁ = 40 P₂ = 2.80 Q₂ = 60 P₁ = 2.20 Q₁ = 90 P₂ = 1.80 Q₂ = 110 P₁ = 1.20 Q₁ = 140 P₂ = 0.80 Q₂ = 160 a. Construct the demand curve for this firm with P on the vertical and Q on the horizontal axis. b. Using the equation for PED, calculate the price elasticity of demand. Use absolute value to determine and describe the range of elasticity. c. Using the results from "b" and the equation for TR, analyze the relationship between the ranges of elastic- ity and revenues. d. Using the graph from "a" and the analysis from "c," predict the price this firm will likely charge customers. Why? Below is the price and quantity information a firm. For example, at a price of $2.80, 60 units are sold. P₁ = 3.20 Q₁ = 40 P₂ = 2.80 Q₂ = 60 P₁ = 2.20 Q₁ = 90 P₂ = 1.80 Q₂ = 110 P₁ = 1.20 Q₁ = 140 P₂ = 0.80 Q₂ = 160 a. Construct the demand curve for this firm with P on the vertical and Q on the horizontal axis. b. Using the equation for PED, calculate the price elasticity of demand. Use absolute value to determine and describe the range of elasticity. c. Using the results from "b" and the equation for TR, analyze the relationship between the ranges of elastic- ity and revenues. d. Using the graph from "a" and the analysis from "c," predict the price this firm will likely charge customers. Why?
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Related Book For
Essentials of Statistics for Business and Economics
ISBN: 978-1305081598
7th edition
Authors: David Anderson, Thomas Williams, Dennis Sweeney, Jeffrey Cam
Posted Date:
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