Daffy’s is a pet care company that recently increased the average price of its services by 5%. As a result, the number of customers dropped by 4%. How will this 5% increase of the average price of services impact total revenue at Daffy’s?
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Daffy’s is a pet care company that recently increased the average
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- Daffy’s is a pet care company that recently increased the average price of its services by 5%. As a result, the number of customers dropped by 4%. Based on this information, what is the price elasticity of demand for services at Daffy’s? How will this 5% increase of the average price of services impact total revenue at Daffy’s? Buffy’s, a pet adoption company, opens up right next door to Daffy’s. How will this likely impact the demand for services at Daffy’s? Bufasthar, another pet care company in the area that competes with Daffy’s decided to increase the average price of its services by 3%. How will this decision likely impact the demand for services at Daffy’s? Assume that the average disposable income in the area in which it operates decreased by 4% over the last year. As a result, the number of customers at Daffy’s decreased by 3%. Based on this information, what is the income elasticity of demand for services at Daffy’s? Are pet care services at Daffy’s considered…Daffy’s is a pet care company that recently increased the average price of its services by 5%. As a result, the number of customers dropped by 4%. Bufasthar, another pet care company in the area that competes with Daffy’s decided to increase the average price of its services by 3%. How will this decision likely impact the demand for services at Daffy’s?Daffy’s is a pet care company that recently increased the average price of its services by 5%. As a result, the number of customers dropped by 4%. Buffy’s, a pet adoption company, opens up right next door to Daffy’s. How will this likely impact the demand for services at Daffy’s?
- Your firm’s research department has estimated the income elasticity of demand for nonfed ground beef to be −1.94. You have just read in The Wall Street Journal that due to an upturn in the economy, consumer incomes are expected to rise by 10 percent over the next three years. As a manager of a meat-processing plant, how will this forecast affect your purchases of nonfed cattle?Salina advertises her production of home workout supplies. Initially an exercise floor pad is sold for $25 per pad. At the price of $25, she sells 50 workout floor pads. Suppose Salina decides to increase the price of this product to $35. Sales fall to 40 pads. Assume the price elasticity of demand is 0.60 Based on the price elasticity of demand, without calculating the actual change in total revenue, what do you expect to happen to total revenue? Calculate total revenue at a price of $25. Calculate total revenue at a price of $35. Did total revenue increase or decrease?Your firm’s research department has estimated the income elasticity of demand for non fed ground beef to be -1.94. You have just read in the Wall Street Journal that due to an upturn in the economy, consumer incomes are expected to rise by 10 percent over the next three years. As a manager of a meat-processing plant, how will this forecast affect your purchases of non fed cattle?
- Demand for a product is price inelastic. What effect will a rise in price have on demand and total revenue? Pick a, b, c, or dA local pizzeria sells 500 large pepperoni pizzas per week at a price of $20 each. Suppose the owner of the pizzeria tells you that the price elasticity of demand for his pizza is -2, and he asks you for advice. He wants to know two things. First, how many pizzas will he sell if he cuts his price by 10%? Second, how will his revenue be affected?A local pizzeria sells 500 large pepperoni pizzas per week at a price of $20 each. Suppose the owner of the pizzeria tells you that the price elasticity of demand for his pizza is -3, and he asks you for advice. He wants to know two things. First, how many pizzas will he sell if he cuts his price by 10%? Second, how will his revenue be affected? If he cuts his price by 10%, his sales will increase to______pizzas, and his total revenue will increase to $ _____.
- You work in the marketing department of a major telecommunications company. You discover that demand for phone calls during business hours is inelastic, and demand for phone calls during evening hours is elastic. How could your company use this information to increase its total revenue? Fully explain your answer.A firm manufactures high priced gold plated wrist watches. The firm is considering lowering the price of its watches from the current $1000 per unit to $700 per unit. The firm currently sells 6000 units per year. The firm's staff economist believes the price elasticity of demand to be -3 over this price range. If the firm lowers the price, will the total revenue increase, decrease or remain unchanged? Why? If it lowers the price, what will be the new level of quantity demanded? Of new total revenue? Would you suggest the firm to offer further price discount? Why? And Why not?Suppose that the Blinn College Deli is currently selling 500 chef salads per day when the price is $5. Suppose that the own-price elasticity of demand for chef salads is -0.8. As the Deli manager you decide to lower the price by $0.50. Which of the following is most likely to happen? Chef salad sales will fall by approximately 8% and total revenue will be lower. Chef salad sales will rise by approximately 8% and total revenue will be higher. Chef salad sales will fall by approximately 8% and total revenue will be higher. Chef salad sales will rise by approximately 8% and total revenue will be lower.