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
Development of Transportation and Marketing Facilitates: The expansion of an industry may expedite the development of transportation and marketing facilities that will decrease th

define scarcity and oppurtunity cost.show how these concepts are useful in managerial decision making

Bank of Central Clearance ,Settlement and Transfer This function was first developed by the bank of England toward the middle of the nineteenth century. In 1954, a scheme was

Q. Explain about Isoquant Map? We can label isoquants in physical units of output without any difficulty. Because every isoquant signifies a specified level of output it's poss

what are the limitation of managerial economics and what is the solution of it?

distinguish between industry demand and firm demand..

BALANCE OF PAYMENTS The Balance of Payments of a country is a record of all financial transactions between residents of that country and residents of foreign countries.  (Resi

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

Consider the following hypothetical story: Last spring, there was an outbreak of a nasty disease known as cyclosporiasis, which was eventually traced to Guatemalan raspberries. Tog

briefly explain oppurtunity cost in decision making?