LawnTech sells its sonic gopher repeller at a price of $380, and estimates price elasticity of...
LawnTech sells its sonic gopher repeller at a price of $380, and estimates price elasticity of demand at -2.6 at this price. At that price, LawnTech sells 35,000 units per year. LawnTech is thinking about cutting its price by -3.5%. How many MORE units can LawnTech expect to sell at the new price? Rounding: tenth of a unit.
Homework Answers
E = (% change in quantity demanded/% change in price)
-2.6 = % change in quantity demanded/(-3.5%)
% change in quantity demanded = -2.6*(-3.5%) = 9.1%
So,
More units to be sold = 35000*9.1%
More units to be sold = 3185 units
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LawnTech sells its sonic gopher repeller at a price of $380, and
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PART 2
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PART 2
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A monopoly sells its good in the United States, where the elasticity of demand is - 2.1, and in Japan, where the elasticity of demand is -5.2. Its marginal cost is $11. At what price does the monopoly sell its good in each country if resales are impossible? The price in the United States is $ . (Round your answer to the nearest penny.)
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