Advanced Microeconomics College Level

posted by .

Information on the price elasticity of demand is particularly importatn to managerial decision making because:
A) the higher the price elasticity of demand for a product is, the more profitable it will be to produce more of it.
B) depending on the elasticity coefficient, decision makers will immediately know if a price change will cause profits to increase or decrease
C) it allows one to predict how total revenue will respond, i.e., increase or decrease, to a change in price.
D) as the price elasticity coefficient approaches one, profits will increase.

  • Advanced Microeconomics College Level -

    not postive but I think it's a

Respond to this Question

First Name
School Subject
Your Answer

Similar Questions

  1. Economics - Cournot Model

    There is one firm with a marginal cost of 0. It's monopoly price is 10. Another firm enters, also with zero marginal cost. Using the Cournot model, would would the new oligopoly price be?
  2. Managerial Economics/Math

    This is an MBA-level Managerial Economics Course. I'm working on some HW and just want to double-check my answers. 1. Jimbo's is a new company producing exploding cigars. Jimbo's company has the following demand curve for the cigars: …
  3. economics

    You are a team working for an economic consulting firm; your client is “The New Delmonico Steakhouse,” a high-end steak place with four restaurants in Manhattan. Your client is considering opening a single restaurant in Chicago …
  4. managerial economics

    Explain the relationship between product X, product Y and product Z or the properties of each according to the following statements a. Cross price elasticity between X and Y is -4 b. Cross price elasticity between X and Y is 12 c. …
  5. Economics

    Suppose a manager is interested in implementing third-degree price discrimination. The manager knows that the price elasticity of demand for Group 1 is -2 and the price elasticity of demand for Group 2 is -1.2. Based on this information …
  6. economics

    suppose the demand curve for a product is given by Q=10-2P+Ps1,where P is the price of the product and Ps is the price of a substitute good. the price of the substitute good is $2.00. a)suppose P=$1.00, what is the price elasticity …
  7. Managerial Economic

    The equation for a demand curve has been estimate to be Q = 100 - 10P + 0.5Y, where Q is quantity, P is price, and Y is income. Assume that p = 7 Y = 50. a. Interpret the equation b.At a price of 7, what is price elasticity?
  8. Managerial Economic

    Mr. Smith has the following demand equation for a certain product: Q = 30 - 2P. a. At price of $7, what is point elasticity?
  9. Economics

    1.calculate the price elasticity of demand when the price was increased from R25 to R40 ?
  10. Math

    The demand equation for a product is: q=60/p + ln(65-p^3) A) Determine the point of elasticity of demand when p=4, and classify the demand as elastic, inelastic, or of unit elasticity at this price level. B) If the price is lowered …

More Similar Questions