Price elasticity of demand, Managerial Economics

Assignment Help:

For some time, two firms have charged $0.90 per standard unit of crating materials for shipping a particular type of machine tool and each has been selling about 20,000 units per month.  Last month, U-Pak-It reduced its price to $0.80 per unit and its volume increased to 25,000 units.  During that month, Boxit (the other company) maintained its price at $0.90 but saw its volume decline to 17,000 units.

a. What is the price elasticity of demand facing U-Pak-It?

b. What is Boxit's cross-price elasticity of demand for U-Pak-It price changes?

c.  If the price elasticity of demand for Boxit is the same as that for U-Pak-It, what price reduction for Boxit would be required to increase its monthly volume back to 20,000 units per month?


Related Discussions:- Price elasticity of demand

Features of planned economy, Features of Planned Economy The command e...

Features of Planned Economy The command economies relies exclusively on the state.  The government will decide what is made, how it is made, how much is made and how distribut

Factors affecting long run trend of terms of trade, Factors affecting the l...

Factors affecting the long run trend of the Terms of Trade for developing countries Most Third World countries have been faced by a fall in their terms of trade over the long

Optimum combination of resources, Optimum combination of resources The...

Optimum combination of resources The firm can maximise output given costs.  That is when the entrepreneur attains the highest isoquant given a particular Isocost. At t

Budget planning, they manufacture a single product, specialty curry sauce. ...

they manufacture a single product, specialty curry sauce. They are interested in developing 12 MONTH budget models and want to perform decision analysis on this model. Curryrus.com

Williamson model, williamson model and managerial discretion about its obje...

williamson model and managerial discretion about its objective and statement of problem

Supply and demand, Discuss some of the effects of the economic downturn on ...

Discuss some of the effects of the economic downturn on supply, demand, inferior goods, complimentary goods, substitute goods, and price. words accepted#

Derevatives ., how to solve problems using derivatives ?

how to solve problems using derivatives ?

Banking system, T HE BANKING SYSTEM Consists of all those institutions...

T HE BANKING SYSTEM Consists of all those institutions which determine the supply of money.  The main element of the Banking System is the Commercial Bank (in Kenya).  The sec

Mba assignment, what is the role of managerial economics in running a busin...

what is the role of managerial economics in running a business?

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd