2 years ago

A shoe factory sells a certain brand of shoes for $50 per pair. After a celebrity

Business

2 answers:

vladimir1956 [14]2 years ago

5 0

Answer:

Hope this helps

crimeas [40]2 years ago

5 0

Answer:

Explanation:

The factory would most likely take advantage of this situation, and try to sell more of the shoes at a higher price, for the greater profit.

A,B and D do not make sense as the factory would then either be making less money or not profiting at all.

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When the price of a good is $5, the quantity demanded is 120 units per month; when the price is $7, the quantity demanded is 100

Gre4nikov [31]

Price elasticity can be calculated using the attached formula where:
the first term represents the % change in quantity and the second term represents the % change in price

% change in quantity = (100-120) / (220/2) = -2/11 x 100 = -18.1818%
% change in price = (7-5) / (12/2) = 33.3333%

price elasticity = 18.1818/33.3333 = 0.55

Note that the price elasticity is usually taken as an absolute value.