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juin [17]
3 years ago
6

The only producer of chocolate bunnies in the world, Choco's Bunny Company, recently expanded its production capacity from 1,000

to 2,000 bunnies per day. If the price elasticity of demand for bunnies is 3.33, by how much will the company have to reduce its price to sell the additional 1,000 bunnies (by the midpoint method)
Business
1 answer:
Sophie [7]3 years ago
5 0

Answer:

19.82%

Explanation:

Midpoint method = Q2 - Q1 / [(Q2 + Q1) / 2] / P2 - P1 / [(P2+P1) / 2]

3.33 = 2000 - 1000 / [(2000 + 1000) / 2] / P2 - P1 / [(P2+P1)/2]

3.33 = 0.66 / (P2 - P1) / [(P2+P1)/2]

By cross multiplying we have

0.66 = 3.33 [ (P2 - P1) / [(P2+P1)/2]

divide both sides by 3.33

19.82% = The mid point change in price.

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Arlecino [84]

Answer:

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4 0
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What are the disadvantages of a modern office?
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8 0
4 years ago
Sissie owns two items of business equipment. Both were purchased in 2015 for $100,000, both have a 7-year MACRS recovery period,
MariettaO [177]

Answer:

Sissie must report both operations separately, even though the gain in one of them does offset the loss on the other:

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