Price elasticity of demand for this linear demand curve
Course:- Operation Management
Reference No.:- EM132281434

Assignment Help
Expertsmind Rated 4.9 / 5 based on 47215 reviews.
Review Site
Assignment Help >> Operation Management

Assume the demand for a product is related to its price and to income as follows: Qdx= -145 - 25PX + 0.2Inc

Where [Q = quantity], [Px = Price of our good X], [Inc = income]

Part a: Write out the formula for Price Elasticity of Demand,

Part b: Calculate the price elasticity of demand for this linear demand curve,

Part c: Assuming the income level is $10,000, and price is $5, calculate the new optimal quantity

Part d: Calculate the price elasticity of demand at this point of P=$5, and Income=$10,000.

Put your comment

Ask Question & Get Answers from Experts
Browse some more (Operation Management) Materials
A four-year financial project has net cash flows of $50,000, $40,000, $30,000, and $20,000 in the next four years. It will cost $75,000 to implement the project. If the requir
•Assess your current environment at work (or school) and recommend steps you believe would best motivate workers (or students.) Provide specific examples to support your res
Compute the exponentially smoothed forecast of calls for each week. Assume an initial forecast of 50 calls in the first week, and use a = .2. What is the forecast for week 2
Thinking about fundamental objectives and means objectives is relatively easy when the decision context is narrow (buying a telescope, renting an apartment, choosing a restaur
A product is produced in batches of 100 units. The machine requires one hour for setup. The processing time is one minute per unit, but the machine can process 5 units simulta
Think about your own goals to achieve work-life balance in your work life. How will these goals influence the type of career choices that you make? What about the type of comp
Wonka Confectioners most recent FCF was $48 million, which is expected to grow at a constant rate of 6%. The firm's WACC is 12% and it has 15 million shares of common stock ou
Although charismatic leaders can use their abilities to accomplish great things, there are also concerns about charismatic leadership from a moral standpoint. providing a para