What is the arc price elasticity of demand, Managerial Economics

1.  Joe is evaluating the marketing strategy at his restaurant and inn. Suppose that in response to a $2.00 off sales promotion for spaghetti dinners, Joe finds that nightly dinner sales increase from 20 per night to 40.  Normally, the dinners sell for $6.00.

a. What is the arc price elasticity of demand for Joe's spaghetti dinners?

b. Would Joe increase revenues by further reducing the price? What about profits? Explain.

Posted Date: 4/1/2013 5:44:08 AM | Location : United States







Related Discussions:- What is the arc price elasticity of demand, Assignment Help, Ask Question on What is the arc price elasticity of demand, Get Answer, Expert's Help, What is the arc price elasticity of demand Discussions

Write discussion on What is the arc price elasticity of demand
Your posts are moderated
Related Questions
Open Market Operations The Central Bank holds government securities.  It can sell some of these, or buy more, on the open market, buying or selling through a stock exchange or

Real and nominal measures Output, Expenditure and Income can be valued at current market price in which case we speak, for example, of money or Nominal NNP, or NNP valued

Question: (a) Under what conditions would a central bank be considered independent. (b) Discuss the effects of delegating monetary policy making to an independent agent on

The variance of the OLS estimator is VAR( ^B)=σ 2 /ns 2 x , where   s 2 x =£x 2 /x You're hired to estimate   and you're going to be paid according to the accuracy of your esti

How Hospital administrator use concept of managerial economics Hospital administrator can use tools and concepts of managerial economics to determine the optimal allocation of

THE BALANCING ITEM Since for ever position entry in the current and capital accounts there is a corresponding negative entry in the monetary account, and for every negative en

Q. What do you mean by Kinked Isoquant? This isoquant presumes only limited substitutability of labour andcapital. There are just a few processes for generating any one commodi

Q. Explain about Transaction Cost Theory? The below model reveals market and institutions as a possible form of organisation to coordinate economic transactions. When external

Organization for Economic Development (OECD) An international organization found in Paris France in 1961, to act as a worldwide forum to stimulate world trade and

The production function can have many uses. It can be used to compute least-cost factor combination for a given output or maximum output combination for a given cost. Knowledge of