Question

In: Economics

1- At $87 , a firm can sell 4,510 stereo earphones (3.5 mm for android). At...

1- At $87 , a firm can sell 4,510 stereo earphones (3.5 mm for android). At this price, elasticity is estimated at 2.4. What is the change in total revenue (+ or -) if the firm drops price by 9%? Round your answer to the nearest dollar.

2 - At $178, a firm can sell 18,985 stereo earphones (3.5 mm for android). These are premium earphones, guaranteed for 5 years. At this price, elasticity is estimated at 0.5. What is the change in total revenue (+ or -) if the firm drops price by 11%?

Expert Solution

a.) In this question, P₁= $87, Q=4510, elasticity, e=2.4, Price dropped by 9%

We know that

or

Now Total revenue earlier was (TR)= P.Q=(87).(4510)=392370

Change in Quantity,

[Here new means after price change, and old means before price change]

Also,

Therefore Change in total revenue is

b.) Proceeding in a similar manner

Rahul Sunny answered 3 years ago

At $73 , a firm can sell 4,525 stereo earphones (3.5 mm for android). At this...

At $73 , a firm can sell 4,525 stereo earphones (3.5 mm for android). At this price, elasticity is estimated at 2.4. What is the change in total revenue (+ or -) if the firm drops price by 10%? Round your answer to the nearest dollar.

At $80 , a firm can sell 4,715 stereo earphones (3.5 mm for android). At this...

At $80 , a firm can sell 4,715 stereo earphones (3.5 mm for android). At this price, elasticity is estimated at 2.2. What is the change in total revenue (+ or -) if the firm drops price by 12%? Round your answer to the nearest dollar. At $171, a firm can sell 19,195 stereo earphones (3.5 mm for android). These are premium earphones, guaranteed for 5 years. At this price, elasticity is estimated at 0.4. What is the change in...

Question 9 At $85 , a firm can sell 4,850 stereo earphones (3.5 mm for android)....

Question 9 At $85 , a firm can sell 4,850 stereo earphones (3.5 mm for android). At this price, elasticity is estimated at 2.6. What is the change in total revenue (+ or -) if the firm drops price by 9%? Round your answer to the nearest dollar. Question 10 (10 points) At $177, a firm can sell 18,520 stereo earphones (3.5 mm for android). These are premium earphones, guaranteed for 5 years. At this price, elasticity is estimated at...

A firm is a ______ when it can sell as much as it wants at some...

A firm is a ______ when it can sell as much as it wants at some given price P, but nothing at any higher price. monopoly oligopoly price taker price setter

P&L is a profit-maximizing shirt manufacturing firm. The firm can sell all the shirts it can...

P&L is a profit-maximizing shirt manufacturing firm. The firm can sell all the shirts it can produce to retailers at a price of $20 each. P&L can hire all of the workers it wants at a market wage of $120 per day per worker. The table below shows the firm’s short-run production function. Number of Workers Number of Shirts per Day 0 0 1 10 2 25 3 45 4 60 5 72 6 80 7 85 8 82 Answer...

If a competitive firm can sell a bushel of soybeans for $25 and it has an...

If a competitive firm can sell a bushel of soybeans for $25 and it has an average variable cost of $24 per bushel and the marginal cost is $26 per bushel, the firm should: increase the price cut output to zero reduce output expand output

If a firm can sell as much as it wants at the going price, and loses...

If a firm can sell as much as it wants at the going price, and loses its entire sales if it raises the price above the going price: Answers: a) its marginal revenue is greater than the price at each quantity sold. b) the average revenue curve is downsloping. c) the average revenue curve is horizontal. d) the demand curve is vertical.

We know that a firm in a competitive market can sell as much as it produces....

We know that a firm in a competitive market can sell as much as it produces. Does this mean a firm in a competitive market should produce as much as it can? Explain your answer. 7- We know that a monopolist can choose any price it likes. Does this mean that a monopolist should choose the highest price?

Firm X, operating in a perfectly competitive market, can sell as much or as little as...

Firm X, operating in a perfectly competitive market, can sell as much or as little as it wants at the market price. The firm’s cost function is C(Q) = 600 + 8Q + 6Q 2 . a. At a market price of $140 per unit, what is the firm’s profit maximizing quantity? What is their profit? b. At a market price of $80 per unit, will the firm stay in business in the short-run? If so, what quantity would they...

Suppose a firm can sell its product for a price of $75 (no more, no less)....

Suppose a firm can sell its product for a price of $75 (no more, no less). Suppose that the marginal cost curve and average variable cost curves cross at $100 and a quantity of 10. Assume that fixed costs are $0. At a quantity of 10, total revenue would be: 750 At a quantity of 10, variable cost would be: ________ 0 or 1,000 Since fixed costs are $0, profit at 10 units of output would therefore be: ________ -250,...