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PROBLEM 2
Now that you've analyzed this market, you tell your friend that it would be helpful to know more about how the consumer base reacts to changes. Therefore, you tell them about Price Elasticity of Demand.
[
egin{array}{|c|c|c|}
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ext{Price} & ext{Quantity} & ext{Demand} \
hline
end{array}
]
int9306_piratemail_cv_edu/_layouts/15/doc2.aspx?sourcedoc=%7Bf0eaaa6a-3f67-443
Search for tools, help, and more (Alt + Q)
Turnitin
PROBLEM 2 Now that you've analyzed this market, you tell your friend that it would be helpful to know more about how the consumer base reacts to changes. Therefore, you tell them about Price Elasticity of Demand.
Quantity Price Demand Coefficient of Price Elasticity of Demand $1,127 546
OUTCOME OF TOTAL REVENUE TEST
CHARACTERIZATION
PRICE CHANGE
ELASTIC INELASTIC PRICE DECREASES, THEN INCREASES DECREASES YC c TOTAL REVENUE E E
$3,666
488
ELASTIC INELASTIC PRICE DECREASES, THEN INCREASES DECREASES C TOTAL REVENUE SE
$5,295
411
ELASTIC INELASTIC PRICE DECREASES, THEN INCREASES DECREASES TOTAL REVENUE E E
$9,054
376
ELASTIC INELASTIC PRICE INCREASES, THEN INCREASES DECREASES C TOTAL REVENUE E
$10,555
318
ELASTIC INELASTIC PRICE INCREASES, THEN INCREASES DECREASES C TOTAL REVENUE E
$12,756
262
ELASTIC INELASTIC PRICE DECREASES, THEN TOTAL REVENUE
INCREASES DECREASES
$17,232
233
ELASTIC INELASTIC C
PRICE INCREASES, THEN TOTAL REVENUE
INCREASES DECREASES
$18,122
173
ELASTIC INELASTIC PRICE DECREASES, THEN TOTAL REVENUE
INCREASES DECREASES
$21,781
146
ELASTIC INELASTIC PRICE INCREASES, THEN INCREASES DECREASES TOTAL REVENUE E
$24,881
53
Problem 2 Questions I have gone ahead and copied the market demand data (from Problem 1), which you will use to do each of the following: 1. Calculate the Coefficient of Price Elasticity of Demand for each range of prices 2. You will then characterize that response as either Elastic or Inelastic. 3. Use the given price change to identify what would happen to Total Revenue. As you can see, I have already done the first range of prices, calculated the coefficient of Price Elasticity of Demand. I then characterized it as shown. Finally, using the total revenue test, I have identified the change to Total Revenue given the price change identified.