Ptarmigan Company produces two products. Product A has a contribution margin of $85.80 and requires 11 machine hours. Product B
1 answer:
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Answer:
0.583
Explanation:
Data provided in the question;
Average dinner charges = $8.75
Initial demand = 3,000 atrons
Increase in price = $0.50
Final demand = 2,900
Thus,
change in demand = 3,000 - 2,900 = 100
Now,
The price elasticity of demand =
also,
Percentage change in demand =
=
= 3.33%
Percentage change in price =
=
= 5.714
thus,
The price elasticity of demand =
= 0.583