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
Aside from the price of a product and its substitutes, another significant element of demand for a product is consumer's income. As noticed previously, relationship between demand

Problem 1: a) Explain what is meant by ‘price discrimination' and what are the different types of price discrimination. b) Under what conditions is it possible and profitabl

definition of total revenue,marginal revenue,average revenue

If a firm's organisational characteristics have not any implications for its behaviour or more possibly have implications that can be taken into account without adopting a behaviou

Electron Control, Inc., sells voltage regulators to other manufacturers, who then customize and distribute the products to quality assurance labs for their sensitive test equipment

Suppose that the price elasticity of demand for cereal is -0.75 and the cross-price elasticity of demand between cereal and the price of milk is -0.9. If the price of milk rises by

how realistic is the sales maximization model from experience with business objectives as pursued by Zimbabwean firms

Question 1: (a) Describe the argument that market entry erodes profits in the long run. (b) Give some reasons and discuss possible strategies used for profits to persist eve

Determine the uses of Managerial economics Managerial economics studies the application of the principles, methods and techniques of economics to managerial problems of busine