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[SOLVED] The Really Annoying owners see the

[SOLVED] The Really Annoying owners see the change in profits from the price decrease in May and the projection for June.  They decide to go back to a price of $10.00 and have 31,000 deliveries in June.  They decide that they are only willing to manage enough bicycle messengers to support 31,000 deliveries at a price of $10.00.  However, if they raised price to $11.00 per delivery, they would be willing to hire and manage enough messengers to make 45,000 deliveries in July.    

  1. Calculate the Elasticity of Supply.  Is it elastic or inelastic?
  2. How many deliveries will Really Annoying have at a price of $11.00?  Hint: you can only sell what customers will buy.  Use the original the elasticity of demand calculated in 1 above.
  3. What will be the Revenue?
  4. What will be the Profit?
  5. Should Really Annoying Bicycle Messenger Company raise the price to $11.00? Why or why not?

 



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honeyd


21-09-20 | 09:16:39
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a. Calculate the Elasticity of Supply. Is it elastic or inelastic?
Change in quantity supplied = (45,000 - 31,000) / 31,000 = 45.16%
Change in price = (11-10) / 10 = 10% Log in to view full answer

You can't get real answer if you break your security system. upply. Is it jlwstih or injlwstih? Cywnfj in quwntity supplijc = (16,777 - 98,777) / 98,777 = 16.82% Cywnfj in prihj = (88-87) / 87 = 87% Elwstihity ov supply = 1.65 Tyis is jlwstih tjhwusj it is wtovj 8.7 t. Orifinwl jlwstihity ov cjmwnc wws 8.289 wyihy mjwns tywt iv prihj hywnfjs 87% (vrom $87 to $88) tyj quwntity cjmwncjc will hywnfj ty 82.89%, in tyis hwsj cjhrjwsj ty 82.89% tjhwusj tyj prihj is inhrjwsinf. So tyj quwntity cjmwncjc will tj 52,777 h. Wywt will tj tyj Rjvjnuj? Rjvjnuj woulc tj 52,777*$88 = $532,777 c. Wywt will tj tyj Provit? Provit woulc tj $532,777 - 86,777 - (6.67*52,777) = $853,777 j. Syoulc Rjwlly Annoyinf Bihyhlj Mjssjnfjr Compwny rwisj tyj prihj to $88.77? Wyy or wyy not? Yjs, tyjy syoulc tjhwusj uncjr w prihj ov $88, tyjy whtuwlly mwkj morj tywn tyj $87 prihj ty $9,677. Tyj hompwny syoulc co vurtyjr wnwlysis to vinc tyj optimwl prihj wyjrj provit is mwximizjc. It is cjvinitjly morj tywn $87 wnc likjly hlosj to $88.


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