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Question
Joe's Pig Palace sells barbecue plates for $4.50 each, and serves an average of 525 customers per week. During a recent promotion, Joe cut his price to $3.50 and observed an increase in sales to 600 plates per week.a. Calculate Joe's arc price elasticity of demand.
b. Joe is considering permanently lowering his price to $4.00 to increase revenue. How many plates should Joe expect to sell at the new price? Does the move make sense in the light of Joe's desire to increase revenue?
Answer
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Related questions
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Q:
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Q:
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Q:
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Suppose a labor market has perfectly inelastic supply that is composed of union and non-union workers, and both groups of workers initially earn the perfectly competitive wage. What happens to the equilibrium employment level and wage for union workers if the union exercises its bargaining power?
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Q:
Who does NOT earn economic rent in a competitive factor market?
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B) Everyone
C) The last factor of production hired
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Q:
Scenario 14.4:
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TP = 100L - 0.125L2 MP = 100 - 0.25L
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Q:
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Q:
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Q:
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Q:
Use the following statements to answer this question:
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Q:
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Q:
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Q:
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Q:
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Q:
An increase in technology that enhances labor productivity will likely result in:
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B) an increase in labor employment and an increase in the wage rate.
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Q:
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Q:
If leisure is a normal good, then the income effect of a decrease in wage will
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B) increase the number of hours worked.
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D) increase the sum of leisure plus hours worked.
Q:
The marginal revenue product can be expressed as the
A) additional revenue received from selling one more unit of product.
B) increment to revenue received from one additional unit of input hired.
C) marginal physical product of an input times the average revenue received from the sale of the product.
D) average physical product of the input times the marginal revenue received from the sale of the final product.