Jelly Welly Candy is a boutique company that produces and sells a distinctive kind of jellybeans with
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Jelly Welly Candy is a boutique company that produces and sells a distinctive kind of jellybeans with high quality, unusual flavors. Suppose Jelly Welly candies has a demand curve: P = 20 - .01Q, where Q denotes the pounds of Jelly Welly candies demanded per week at various prices per pound.
- (6 points) For price elasticity, identify the elastic range of demand, the unit elastic range of demand, and the inelastic range of demand for Jelly Welly. Include a graph of the demand curve, and make sure to indicate the numerical values of price and quantity axis intercepts, as well as the coordinates of any important price / quantity points.
- (8 points) What price maximizes total revenue for Jelly Welly? How many pounds of Jelly Welly candy will customers demand at this price? What is the marginal revenue at this volume?
- (6 points) Will this price also maximize total profit? Explain why or why not using marginal analysis. State any assumptions you make.
Related Book For
Fundamentals of Cost Accounting
ISBN: 978-0077398194
3rd Edition
Authors: William Lanen, Shannon Anderson, Michael Maher
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