1) The elasticity of price to changes in demand and price
Demand Change =450-400=50400=0.125
Price change = 20-18 = 2 x 20 = 0.1
Demand elasticity equals 0.125 minus price elasticity equals 1.25
2) In terms of the claim that increasing the cost of food leads to greater sales of the commodities that are demanded, I did anticipate that if the price was lowered to $18, the higher amount that was purchased would more than make up for the reduced price. The
$8,100.
3. Demand fiuctuation in cost
Change in price =18-16=218=0.1 Change in demand =500. 450=50450=0.1
Price change minus demand change equals one
4. The revenue decreased as a result of the further price reduction from $18 to $16, and yes, I would've anticipated this to happen as the cost became inelastic. The worth of 450 meals at $ 18 was reduced from $ 8100 to $ 8,000 for 500 meals at $ 16 each.
5. At $20 per meal, 400 meals cost $8,000 in total
For 450 lunches at a cost of $18 per, the whole revenue is $8100
At $16 per meal, 500 dinners would cost a total of $8000. Yes, these
$8000 for 400 meals at a price of $20 each; when the price is down to
revenue has now returned back to the original price of $8,000 per meal.
References:
Rittenberg, L & Tregarthen, T. (20o9) Demand and supply (chapter 3 principles of economics
https://my.uopeople.edu/pluginfile.php/1186302/mod- page/content/18/principles-ofeconomicesc