Solved: Elasticity of ice cream, So, he increased his prices by 18%, yet revenues fell, Microeconomics

+44 141 628 6080
[email protected]

Elasticity of ice cream

Question:

An ice cream store owner reads in the local paper that the elasticity of market demand for ice cream is -.38. He concluded that if he raised the price of ice cream, his total revenue would increase. So, he increased his prices by 18%, yet revenues fell substantially. Why did this outcome occur?

Solution Preview :

Prepared by a verified Expert

Microeconomics: Elasticity of ice cream

Reference No:- TGS02089047

Now Priced at $20 (50% Discount)

Recommended (95%)

Rated (4.7/5)

Have a Question? (oR Write a Review)

Write atleast 100 words!!

Recent Questions Asked Microeconomics

Q : What is the percentage change in output-cobb douglas

If labor hours increase by 10%, what is the percentage change in output (provide a numerical answer)?

Q : Write a formula for estebans family of indifference curves

Write a formula for Esteban's family of indifference curves. Plot some of those curves on a graph.

Q : Draw her budget constraint and identify chosen consumption

Draw her budget constraint and identify her chosen consumption bundle.

Q : How much butter does rupert buy

How much butter does he buy, assuming that he consumes nothing else? Draw his budget constraint and identify his chosen consumption bundle.

Q : Elasticity of ice cream

So, he increased his prices by 18%, yet revenues fell substantially. Why did this outcome occur?

Q : What is the price of butter

The price of bread is $0.60 and Aaron's income is $40. He buys 45 pounds of bread, 26 ounces of butter, and nothing else. What is the price of butter?

Q : What is the cross elasticity of demand between two brands

What is the cross elasticity of demand between the two brands of widgets? (Use the midpoint method described in equation 3.14).

Q : Calculate the price elasticity of demand for paint

1. Compute the price elasticity of demand for paint and show your calculations.

Q : Calculate the own price elasticity of demand

Calculate the own price elasticity of demand when the price goes from $5 to $4.

1945288

Questions
Asked

3,689

Active Tutors

1451027

Questions
Answered

Start Excelling in your courses, Ask a tutor for help and get answers for your problems !!

ask Question

Asked Questions

Discuss patient with athsma about use of bronchodilators

You're instructing a patient with athsma about the use of bronchodilators. You should teach the patient which one?

Discuss new forms of advertising changing opdps work

How have social media and other new forms of advertising changing OPDP's work?

Observing and reporting a correctional clients behavior

Observing and reporting a correctional client's behavior is extremely important, to ensure they receive the right mental health care.

Discussion about improve patient satisfaction scores

You are trying to improve patient satisfaction scores in your hospital's emergency department. You decide to poll 40 patients a day for three weeks.

Problem concerning about the risk for stroke

Sam is concerned about his risk for his stroke since his dad died of stroke at age 57 based on the following information why would you recommend

Patient presented with acute-onset abdominal pain

You are on your 5th straight duty in the Urgent Care and you are seeing a 18 yo may who presented with acute-onset abdominal pain for 2 days.

Discuss - male with a history of moderate persistent asthma

A nurse is caring for an 8-year-old male with a history of moderate persistent asthma. He is accompanied by his mom and dad who reported