66 954
Assignments Done
99,1%
Successfully Done
In November 2018

Answer to Question #71439 in Other Economics for Huda

Question #71439
Qx = 235 - 3Px + 40A - 20U + 8Pw
The number of detailing jobs he gets per month (Qx) depends on the price he charges per job (Px), his monthly advertising expenditures (A) measured in Rs. 1,000s, the regional percentage unemployment rate (U), and the average price charged by local car wash businesses (Pw) for a standard wash and wax.
c) Rahim is currently charging Rs 65 per detailing job and spending Rs 3,500 per month on advertising. The regional unemployment rate is 7.5% and the average price of a wash and wax at a local car wash is Rs 15. How many detailing jobs per month can Rahim expect under these conditions?
(e) Calculate the Advertising and price elasticity of demand under conditions described in part c. Is the demand elastic or inelastic? Also calculate the total and marginal revenue.
Expert's answer
Qx = 235 - 3Px + 40A - 20U + 8Pw.
(c) A = Rs 65 per detailing job, A = Rs 3,500 per month, U = 7.5%, Pw = Rs 15.
Rahim expect under these conditions:
Qx = 235 - 3*65 + 40*3,500 - 20*0.075 + 8*15 = 140,158.5 units.
(e) Price elasticity of demand is Ed = -3, so the demand is elastic.
The total and marginal revenue are:
TR = P*Q = 65*140,158.5 = Rs 9,110,302.5.
MR = P = Rs 65.

Need a fast expert's response?

Submit order

and get a quick answer at the best price

for any assignment or question with DETAILED EXPLANATIONS!

Comments

No comments. Be first!

Leave a comment

Ask Your question

Submit
Privacy policy Terms and Conditions