Microeconomics: Principles, Applications, and Tools (8th Edition)

Published by Prentice Hall
ISBN 10: 0-13294-886-9
ISBN 13: 978-0-13294-886-9

Chapter 5 - Elasticity: A Measure of Responsiveness - Exercises - 5.2 Using Price Elasticity - Page 122: 2.14a

Answer

The new quantity per week is 940 plates. The new revenue is \$20,680.

Work Step by Step

$\Delta\ qty=\Delta\ price\times E_d$ $\Delta\ qty=10\times0.6$ $\Delta\ qty=6\%$ The new quantity is $1000-(1000\times6\%)=1000-60=940$ The new price is $20+(20\times10\%)=20+2=22$ The new revenue is %940\times22=20680$
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