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Home / Questions / Danny “Dimes” Donahue is a neighborhood’s 9-year-old entrepreneur. His most recent ventu

Danny “Dimes” Donahue is a neighborhood’s 9-year-old entrepreneur. His most recent ventu

 Danny “Dimes” Donahue is a neighborhood’s 9-year-old entrepreneur.  His most recent venture is selling homemade brownies that he bakes himself. At a price of $1.50 each, he sells 100. At a price of $1.00 each, he sells 300. Is demand elastic or inelastic over this price range? If demand had the same elasticity for a price decline from $1.00 to $0.50 as it does for the decline from $1.50 to $1.00, would cutting the price from $1.00 to $0.50 increase or decrease Danny’s total revenue? 

. Suppose that the total revenue received by a company selling basketballs is $600 when the price is set at $30 per basketball and $600 when the price is set at $20 per basketball.  Without using the midpoint formula, can you tell whether demand is elastic, inelastic, or unit-elastic over this price range? 

Dec 05 2019 View more View Less

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