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Question
(a) Describe clearly the three concepts of elasticity of demand. Use appropriate examples and diagrams to support your answer.
(b) Consider you have been appointed manager of a chocolate company. How far can you use these concepts to maximise revenue? Illustrate your reasoning, with the help of appropriate examples and diagrams.
The daily demand for ABC shoes is estimated to be as follows:-
Qx = 100 - 3Px + 4Py - 0.01M + 2Ax
Where Ax represents the amount of advertising spent on shoes (X), P is the price of good X, Py is the price of good Y and M is the average income. Suppose good X sells at $25 pair, good Y sells at $35, the company utilises 50 units of advertising and average consumer income is $20,000. Calculate and interpret the price, cross and income elasticities of demand.
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The price at which output is sold in a perfectly competitive market is determined by
#how do you draw a demand curve on excel
We couldn''t find "Bob sold 50 fans at $20 a piece last month. This month he decreased the price to $15 and sold 75. What is the price elasticity of demand for fans
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