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Robert E. Lee Grade Schol is contemplating a chocolate bar fund raiser. Weekly sales data from Mrs. Grant's fifth grade class indicate that:

Robert E. Lee Grade Schol is contemplating a chocolate bar fund raiser. Weekly sales data from Mrs. Grant's fifth grade class indicate that: Q=4,000 - 1,000P

where Q is chocolate bar sales and P is price.
How may chocolate bars could be sold at $2 each?
What price would have to be charged to sell 2,500 chocolate bars?
At what price would sals equal zero?
How many chocolate bars could be given away?
Calculate the point price elasticity of damd at a price of $2.



second ?:Income Elasticity. Compact, Inc. is a leading manufactureer of powerful personal computers. Demand for Compact computers is tied to the overal pace of the business sales and therefore, is sensitive to changes in national income. The personal business computer industry is highly competitive, so compact's demand is also very price-sensitive.
During the past year, Compact sold 550,000 personal computers at an average wholesale price of $4,000 per unit. This year, GDP perhousehold is expected to fall from $58,800 to $53,200 as the nation enters a steep recession. Without any price change, Compactexpects current-year sales to fall to 450,000 units.

A calculate the implied are income elasticity of demand.
B Given the projected fall income, the sales manager belives that current volume of 550,000 units could only be maintained with a price cut of $500 per unit. On this basis, calculate the implied are price elasticity of demand.
C Holding all else equal, would a further increase in price result in highter or lower total revenue?

Final question.

Optimal Price, Last week, Discount Food Stores, Inc. reduced the average price on the 22 oz size of Dishwashing Liquid by 1%. In responce, sales jumped 8%.
A. calulate the point price elasticity of demand for Dishwashing Liquid.
B. Calculate the optimal price for Dishwashing Liquid if marginal cost is 70cents per unit.
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510572_ECO_solution.doc

Robert E. Lee Grade School is contemplating a chocolate bar fund raiser.
Weekly sales data from Mrs. Grant's fifth grade class indicate that: Q=4,000 1,000P where Q is chocolate bar sales and P is...

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