When Apple raised the price of iTunes from 99¢ to $ 1.29, GS Boyz’s “ Stanky Legg” sales dropped from 22,686 units to 19,692 units (Glenn Peoples, “ iTunes Price Change: Sales Down, Revenue Up in Week 1,” Billboard, April 15, 2009). What was the song’s arc elasticity of demand?
Answer to relevant QuestionsThe demand curve for a good is Q = 100 – 2p. What is the elasticity at the point p = 10 and Q = 80? Calculate the price and cross- price elasticities of demand for coconut oil. The coconut oil demand function (Buschena and Perloff, 1991) is Q = 1,200 – 9.5p + 16.2pp + 0.2Y,where Q is the quantity of coconut oil demanded ...A producer of outdoor clothing used a focus group to obtain information about the demand for fleece jackets with built-in, battery-operated warming panels. At prices of $ 100, $ 90, $ 80, $ 70, $ 60, and $ 50, the focus ...As reported in the chapter, quarterly revenue for Heinz is estimated as R = 2,094 + 27.97t + 93.8D1 – 125.3D2 – 8.60D3. What does this estimation tell us about second quarter revenues for Heinz? If, as a consultant, you ...Lorna consumes cans of anchovies, A, and boxes of biscuits, B. Each of her indifference curves reflects strictly diminishing marginal rates of substitution. If A = 2 and B = 2, her marginal rate of substitution between cans ...
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