Question

A B C D E F G H I 23 24 1. Last week, Cal sold an average of 4,000 gallons per day at an average price of $2.749 per gallon. This 25 week, he raised the average price by 1 cent to $2.759 per gallon, and both revenues and profits dropped. 26 His station is now selling an average of 3,600 gallons per day. Fixed costs of operating the gas station are 27 $250 per day. 28 What is the price elasticity of demand? Can the demand be characterized as price elastic, price inelastic, or neither? By how much did revenues increase or decrease as a result of the change in price? 32 By how much did profits increase or decline? (Profits are revenue minus all costs.) 29 30 31 Elas By! By! So

please help with question 1

please help with question 2

thanks

Answer 1

As per rules I am answering the first 4 subparts of the question which is the whole of Q1

Quantity	Price
4000	2.749
3600	2.759
Average	Average
3800	2.754
% Change	% Change	Elasticity of demand
-10.000%	0.364%	-27.49
Elasticity	Price Elastic
Revenue Decrease		-1063.6
Profits
Gallons sold	Price	revenue	Cost per gallon	Variable cost per day	Fixed cost	Total cost	Daily Profit
4000	2.749	10996	2.381	9524	250	9774	1222
3600	2.759	9932.4	2.381	8571.6	250	8821.6	1110.8

Workings

AutoSave o 9.3HD Book1 - Excel Sign in File Home Insert Draw Page Layout Formulas Data Review View Help Tell me what you want to do - 11 A = = 0 Calibri BIU - B -A A = E insert - Delete - Format - 0 X Share Comments AY O Sort & Find & Filter - Select Editing Paste La- General 3$ -% Number - . Conditional Format as Formatting Table - Styles Cell Styles Clipboard Font Alignment Cells T24 N O P R S 23 24 Quantity Price 25 4000 2.749 26 3600 2.759 27 Average Average 28 =AVERAGE(L25:L26) =AVERAGE(M25:M26) 29 % Change % Change 30 =(L26-L25)/L25 =(M26-M25)/M25 31 32 Elasticity Price Elastic 33 Revenue Decrease 34 Profits Elasticity of demand =L30/M30 =L26*M26-L25*M25 35 36 Gallons sold 37 4000 38 3600 Price 2.749 2.759 revenue =L37*M37 =L38*M38 Cost per gallon Variable cost per day Fixed cost Total cost Daily Profit 2.381 =L37*037 250 =P37+Q37 =N37-R37 2.381 =L38*038 250 =P38+Q38 =N38-R38 20 Sheet1 Ready E -- 2 ADUENG 8:51 AM 0