Increase revenues when price falls

When the price elasticity of demand for fried cheesy grits at Pixie’s Breakfast Grill is two, in that case a price cut of $2.80 to $2.00 per serving of grits would be most probably to: (1) reduce Pixie’s revenues from grits by roughly forty percent. (2) reduce the consumer surpluses previously enjoyed by grits lovers. (3) cause Pixie’s customers to eat more hash browns and fewer grits. (4) increase Pixie’s revenues from grit sales by about one-third. (5) decrease the economic profits of Pixie’s Breakfast Grill.

Can anybody suggest me the proper explanation for given problem regarding Economics generally?

View Complete Question

Related Questions in Microeconomics

Q : State normal good Normal good : It is a

Normal good: It is a good for which, other things equivalent, a rise in income leads to a rise in demand.

Q : Labor unions-Competitive Markets Can

Can someone please help me in finding out the accurate answer from the following question. The purely competitive labor markets are not characterized through: (1) Most of the individual buyers and sellers of the labor services. (2) Wages equivalent to the marginal res

Q : Unite to form cartels and share

Oligopolies which unite to form cartels and share monopoly profits give an illustration of: (i) collusive behavior. (ii) territorial imperatives. (iii) mergers and acquisitions. (iv) non-collusive strategy. (v) corporate raiding.

Q : Emerging natural monopoly A monopoly

A monopoly will come out naturally when: (w) the government relaxes antitrust laws. (x) economies of scale are large relative to market demand. (y) variable costs are huge relative to fixed costs. (z) variable costs rise as output expands.

Q : Competitive theory of prices Normal 0

Normal 0 false false

Q : Main cause of oligopolies A main cause

A main cause of oligopolies is: (w) mergers. (x) economies of scale. (y) barriers to entry. (z) all of the above. Please choose the right answer from above...I want your suggestion for the same.

Q : Determine competitive price of purely

In this demonstrated figure purely competitive lumber mill’s generic 2×4s now sell for: (1) $3.60 each. (2) $3.00 each. (3) $2.70 each. (4) $2.40 each. (5) $2.10 each.

Q : When would transaction cost be zero All

All transaction costs would be zero when: (1) Congress required current prices to be cut by eighteen percent. (2) market information and transportation were both costless. (3) market prices were legally restricted to production costs. (4) inflation we

Q : Zxcvbnm

dssfghjkgfdsaSDFGHJKHGFDSASDFGHJK SDFGHJKLHGFDSADFGHJKHGFDSFG DFGHJKHGFDSFGHJHGSDFGHJ

Q : Problem on long run competitive

The technology is such that LAC is minimized at firm’s output equivalent to 10 and minimum LAC is Rs. 15. Assume that the demand schedule for the product is given as shown:

Discover Q & A

Leading Solution Library

Avail More Than 1420732 Solved problems, classrooms assignments, textbook's solutions, for quick Downloads

No hassle, Instant Access

Start Discovering

18,76,764

1928891
Asked

3,689

Active Tutors

1420732

Questions
Answered

Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!

Submit Assignment