Question

TRUE or FALSE revenue and elasticity question

Answer 1

Which of the following statements are true (T) and
which are false (F)? No justication required, only the answer counts.
The company Blissful Batteries Inc. sell replacement batteries for Opple's oPad. In the
following, p denotes the unit price of these batteries in dollars and q the quantity sold. We
assume that the function q(p) is differentiable with q0(p) < 0. Blissful Batteries Inc. sell
10000 batteries per week at $5.00 each.


(d) If the replacement battery is a price unit elastic good at a unit price of $5.00, if their
total cost function is of the form C(q) = a+bq with constants a; b > 0 and management
increases the price by a small amount, then their prot decreases.

(e) If the replacement battery is a price inelastic good at every unit price and management
decreases the unit price by 0.2%, then quantity demanded increases by less than 0.2%.

(f) If the replacement battery is a price inelastic good at every unit price and management
decreases the unit price by 1%, then quantity demanded decreases by more than 1%.

Answer 2

with q0(p) < 0 means dq/dp<0 or q - dot <0

Answer 3

ok....

Answer 4

but what happens to the profit?

Answer 5

what relation do elasticity and profit share?

Answer 6

ok..

Answer 7

wait let me process it a second

Answer 8

ok. so what about inelastic goods? (e)

Answer 9

ok i'm thinking.

Answer 10

got it ?

Answer 11

yes. thankyou

Answer 12

poor economy ! always has solving problem like this, and everybody confuses !

Answer 13

so for f i just replace .002 with .01 and it will give the answer?

Answer 14

just like (e)?

Answer 15

hahaha

Answer 16

no you can not say exactly how much decrease because we don't know the amount of dq/dp.

Answer 17

in particular problem perhaps f can be true also, but generally e is true.

Answer 18

so you think you can help with f?

Answer 19

lets do it.

Answer 20

great