Fruit traders in Indramayu (place) sell mangoes from their gardens in 6 fruit shops in their area. Traders want to know the price elasticity of mango demand. 

The six fruit shops are in middle-income areas, and all the stores currently sell the mango for RP 0,79 thousand / kg.
Seasonal sales at 6 stores averaged 4,625 kg/store without any deviation greater than 150 units from the average value.
At this time the entrepreneur wanted to conduct an experiment by setting different price levels for each fruit shop to observe the reaction of sales results to the price level. 

Data on prices and the number of sales at 6 fruit shops can be seen in the table below:

Questions:
a. Create a sales equation (mango demand function) using the data above, in the form of an equation: Y = a + bX
b. What is the function of marginal revenue (MR)?
c. What is the price elasticity if the price of mango is 0,85?
d. Explain the meaning of the results of the calculation of elasticity in point c!

Transcribed Image Text:

Mango fruit sales tables at 6 fruit shops in Indramayu Sales (y) Fruit Store Price in thousands (x) 1 0,79 4,65 0,99 3,02 3 1,25 2,15 4 0,89 4,40 0,59 6,38 6. 0,45 5,50 Mango fruit sales tables at 6 fruit shops in Indramayu Sales (y) Fruit Store Price in thousands (x) 1 0,79 4,65 0,99 3,02 3 1,25 2,15 4 0,89 4,40 0,59 6,38 6. 0,45 5,50

Answer rating: 100% (QA)

Solution a Create a sales equation mango demand function using the data above in the form of an equa... View the full answer