Question
$15.00 Elasticity and Demand
- From Economics: General-Economics
- Closed, but you can still post tutorials
- Due on Jan. 20, 2009
- Asked on Jan. 18, 2009 at 01:22:44AM
Q:
Please provide detailed answers for the attached questions by Tuesday, January 20, by 2:00pm EST US.
$15.00
Professor's Tutorial of Elasticity & Demand with Complete Answers, Table, and Professional Graphs (uploaded)
- This tutorial was purchased 1 time and rated A+ by students like you.
- Posted on Jan 18, 2009 at 1:23:46PM
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A:
Preview: ... ng run, the lockers could sell out and the demand could become greater than supply- so you would want to increase prices up to the point where you make the most profit. In another case, people begin to realize they can share lockers with other members or find that they don’t use the locker as much as they thought, so the number of people demanding lockers decreases. As a price strategist, you would simply lower the price until you once again reach the greatest profit.<br>That is up to a certain point: as you learned in supply and demand, there is a certain price where less people are willing or able to buy a product. So, you want to price the lockers where you elicit the most profit.<br>The formula is provided for you. Y=100-2y where y is the price you charge. You can plot this on a chart or use the table below<br><br>Price Charged $5 $10 $20 $25 $30 $40 <br>Lockers Rented 90 80 60 50 40 20 <br>Net Profits $450 $800 $1200 $1250 $1200 $800<br><br>Notice the pattern of how price increases impact lockers rented and then more importantly how that effects net profits. Since production is not a factor, and costs of operation is set at 0$ every locker is pure profit. Notice when you set the price at $20 you sell more lockers than you do at $25 or $30 but what about net profit? The pricing chart will show that at a price of $25 your profits will be the greatest, based on the formula. If you were to raise or lower the price, you would actually lose money.<br>So, through this chart and complete explanation , as well as showing your work on a chart (although not required in the question) where number of lockers are on the vertical line, and price is on the horizontal axis, you can also show where the price should be set based on the desire to gain the GREATEST net profit. Notice that at $25 a price increase OR decrease of 20% will result in an equal percentage change (20%) in lockers rented- and that revenue will decrease with both an increase or decrease in price; the product has unitary elasticity thus is the proper p ...
Attachments:
Professional Graph of an Inelastic Demand Curve.substitute product.doc (27K) (Preview)
Professionally drawn Perfectly Inelastic .Elastic Curves.doc (28K) (Preview)
Professional Drawing of a extremely elastic demand curve.doc (28K) (Preview)
Professional Graphs a and b.doc (27K) (Preview)
The full tutorial is about 1765 words long plus attachments.
Attachments:
Professional Graph of an Inelastic Demand Curve.substitute product.doc (27K) (Preview) Professionally drawn Perfectly Inelastic .Elastic Curves.doc (28K) (Preview) Professional Drawing of a extremely elastic demand curve.doc (28K) (Preview) Professional Graphs a and b.doc (27K) (Preview) $15.00
elasticity and demand
- This tutorial was purchased 1 time and rated No Rating by students like you.
- Posted on Jan 19, 2009 at 4:14:23PM
A:
Preview: ... elete those texts.<br>other things which if you dont understand ...
The full tutorial is about 51 words long plus attachments.