# Economics

A newspaper story on the effect of higher milk prices on the market for ice cream contained the following: "as a result (of the increase in milk prices), retail prices for ice cream are up 4 percent from last year... and ice cream consumption is down 3 percent." Given this information, compute the price elasticity of demand for ice cream. Will the revenue received by ice cream suppliers have increased or decreased following the price increase? briefly explain.

1. 0
2. 0
3. 36
1. Do a little research and then take a shot. what do you think.
Hint: price elasticity is (%change Q)/(%change P) -- you are given both.

Hint 2: Pre-price change Revenue received is P*Q. Adjust P and Q accordingly. Does total revenue go up or down?

1. 0
2. 0
posted by economyst
2. .75

1. 0
2. 0
posted by zdcv

## Similar Questions

1. ### Economics: Demand and Supply

Suppose the market for ice cream is deregulated. That is, ice cream are free to adjust based on the forces of demand and supply. If a shortage exists in the ice cream market, then the current price must be _______ than the

asked by Anonymous on September 21, 2008
2. ### microeconomics

Just when you really, really want an ice cream cone, the price is rising. But it isn't summertime gouging by manfacturers. The cost of milk fat, the principal ingredient in ice cream, jumped 71% druing the past 6 months to 2.22 at

asked by Kim on February 21, 2007
3. ### microeconomics

Just when you really, really want an ice cream cone, the price is rising. But it isn't summertime gouging by manfacturers. The cost of milk fat, the principal ingredient in ice cream, jumped 71% druing the past 6 months to 2.22 at

asked by Kim on February 21, 2007
4. ### Algebra

The bar graph which is 4% whole mil, 8% milk for cream and 30% cream shows the milk fat percentages in three dairy product s. How many pounds each of whole milk and cream should be mixed to form 200 lb of milk for cream cheese?

asked by Anonymous on April 18, 2014
5. ### Social Studies

1. Why do businesses seek a equilibrium price? A)It ensures that competitors cannot offer lower prices B)It attracts the largest possible number of consumers to the business C)It provides the highest possible prices that consumers

asked by Reeses on April 19, 2017
6. ### Social studies

1. Why do businesses seek an equilibrium price? A. It ensures that competitors cannot offer lower prices B. It attracts the largest possible number of consumers to the business •• C. It provides the highest possible prices

asked by Mackenzie on May 1, 2017
7. ### Algebra

The accompanying bar graph shows the milk fat percentages in three dairy products. A=whole milk @4%. B= milk for cream cheese @8%, and C= cream @30%. How many pounds each of whole milk and cream should be mixed to form 200 lb of

asked by Pam on April 14, 2014
8. ### Algebra 2

an ice cream store has 31 flavors of ice cream and 10 toppings. A regular sundae has one flavor of ice cream, one topping, and comes with or without whipped cream. How many different ice cream sundaes can be ordered? I'm thinking

asked by Jon on December 16, 2007
9. ### Algebra 2

An ice-cream parlor sells sundaes with 3 different types of ice-cream and 4 different toppings. They have 8 flavors of ice-cream and 10 toppings for their customers to chose from.what is the probability that a customer orders a

asked by chels on May 24, 2012
10. ### Algebra!

An ice cream parlor sells sundaes with 3 different type of ice cream and 4 different toppings. They have 8 flavors of ice cream and 10 toppings for their customers to choose from. What is the probability that a customer orders a

asked by OLIO :) on May 26, 2012

More Similar Questions