Question

1. (5 pts.) You work for a local company in Bryan, Texas, that is known for making barbed wire (1,000 ft per roll). Due to the recent supply chain disruptions, the costs for the materials have gone up for every roll of wire sold. Your boss wants to raise the price for wire from $125 per roll to $160 per roll to account for the increase in the cost of materials but isn't sure of the effect this will have on the amount of wire the company sells. The company currently sells 450 rolls of wire in a week. Since you have an economics background, your boss tasks you with finding out the new quantity demanded of wire given the price increase. If the own price elasticity of demand for wire is -0.65 and the income elasticity of demand is -0.80, what is the answer (new quantity demanded) for your boss? Also, is the local company better or worse off with the price increase and why?

          1. (5 pts.) You work for a local company in Bryan, Texas, that is known for making barbed wire (1,000 ft per roll). Due to
the recent supply chain disruptions, the costs for the materials have gone up for every roll of wire sold. Your boss wants
to raise the price for wire from $125 per roll to $160 per roll to account for the increase in the cost of materials but isn't
sure of the effect this will have on the amount of wire the company sells. The company currently sells 450 rolls of wire in
a week. Since you have an economics background, your boss tasks you with finding out the new quantity demanded of
wire given the price increase. If the own price elasticity of demand for wire is -0.65 and the income elasticity of demand
is -0.80, what is the answer (new quantity demanded) for your boss? Also, is the local company better or worse off with
the price increase and why?

1 5 pts you work for a local company in bryan texas that is known for making barbed wire 1000 ft per roll due to the recent supply chain disruptions the costs for the materials have gone up 40015

Added by Anthony M.

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