Mickey Operates A Small Business That Produces 3 Products We Will Call These Products A B And C Mickey S Costs Of Pr 1 (34.23 KiB) Viewed 11 times
Mickey Operates A Small Business That Produces 3 Products We Will Call These Products A B And C Mickey S Costs Of Pr 2 (27.54 KiB) Viewed 11 times
Mickey Operates A Small Business That Produces 3 Products We Will Call These Products A B And C Mickey S Costs Of Pr 3 (24.18 KiB) Viewed 11 times
Mickey operates a small business that produces 3 products. We will call these products A, B, and C. Mickey's costs of production have recently increased by approximately $5,000. Since his total revenue (his sales) was just a little over $100,000, Mickey figured he would pass on the increased costs of production to his customers by raising his prices 5%. But, after raising the price of all three products by 5%, Mickey found himself with LESS money than he had before. He has asked you to find out what happened and has supplied the following data. Complete the blank spaces for total revenue by product, both before and after the price hike, and also calculate the price elasticity of demand. Product A Product B Product C Before Mickey Raises Price Price Units $78.00 $39.00 $19.50 Sum Total Revenue All Products 531 1,025 1,010 Total Revenue
Product A Product B Product C Product A Product B Product C After Mickey Raises Price Units 469 975 Price 990 Sum Total Revenue All Products % chg Q 12.5% 5.0% $82.00 $41.00 $20.50 % chg using a midpoint formula 2.0% % chg P 5.0% 5.0% 5.0% Total Revenue Price Elasticity of Demand
1. What is the price elasticity of demand for Product A? 2. What is the price elasticity of demand for Product B? 3. What is the price elasticity of demand for Product C? 4. Which product (A, B, or C) has inelastic demand? 5. Which product (A, B, or C) has elastic demand? 6. Which product (A, B, or C) has unit elastic demand? 7. Which product (A, B, or C) generated less revenue after the price was increased? 8. Which product generated the same revenue even though it's price was increased?
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