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%?

Solutions

Expert Solution

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

We know that

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 2 years ago

Next > < Previous

Related Solutions

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...

Imagine that inside a cell the [creatine phosphate] = 3.5 mM, [creatine] = 0.6 mM, and...

Imagine that inside a cell the [creatine phosphate] = 3.5 mM, [creatine] = 0.6 mM, and [Pi] = 4.3 mM. Furthermore, imagine that the pH inside the cell is 7.4. Given that ΔG°′ for creatine phosphate hydrolysis is -10.3 kcal/mol, what is the ΔG for creatine phosphate hydrolysis inside the above-described cell, which is at 37 °C? Report your answer in kcal/mol to the nearest tenths. Hint: you might wish to consult the chapter in our text that discusses thermodynamics.

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.

A copper pipe of diameter 3.5 cm and wall thickness 4 mm is used in an...

A copper pipe of diameter 3.5 cm and wall thickness 4 mm is used in an antibiotic factory to convey hot water a distance of 60 m at a flow rate of 20 L/s. The inlet temperature of the water is 90°C. Due to heat losses to the atmosphere, the outlet water temperature is 84°C. The ambient temperature is 25°C. The inside of the pipe is covered with a layer of fouling with a fouling factor of 7500 W/m2°C. What...

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?

Wingler Communications Corporation (WCC) produces premium stereo headphones that sell for $28.90 per set, and this...

Wingler Communications Corporation (WCC) produces premium stereo headphones that sell for $28.90 per set, and this year's sales are expected to be 440,000 units. Variable production costs for the expected sales under present production methods are estimated at $10,000,000, and fixed production (operating) costs at present are $1,560,000. WCC has $4,800,000 of debt outstanding at an interest rate of 8%. There are 240,000 shares of common stock outstanding, and there is no preferred stock. The dividend payout ratio is 70%,...

Wingler Communications Corporation (WCC) produces premium stereo headphones that sell for $28.80 per set, and this...

Wingler Communications Corporation (WCC) produces premium stereo headphones that sell for $28.80 per set, and this year's sales are expected to be 460,000 units. Variable production costs for the expected sales under present production methods are estimated at $10,100,000, and fixed production (operating) costs at present are $1,560,000. WCC has $4,800,000 of debt outstanding at an interest rate of 9%. There are 240,000 shares of common stock outstanding, and there is no preferred stock. The dividend payout ratio is 70%,...

Subjects