Until recently, Dave's Donuts sold their premium chocolate-cornflake-cronut for $3.75, and they would sell 55 per week. Now, Dave has raised the price of the chocolate- cornflake-cronut to $4.25, as a result, they are selling only 45 per week. Using the midpoint rule, find the price elasticity of demand for the chocolate-cornflake- cronut at Dave's Donuts. [a] 1.6
Until recently, Dave's Donuts sold their premium chocolate-cornflake-cronut for $3.75, and they would sell 55 per week. Now, Dave has raised the price of the chocolate- cornflake-cronut to $4.25, as a result, they are selling only 45 per week. Using the midpoint rule, find the price elasticity of demand for the chocolate-cornflake- cronut at Dave's Donuts. [a] 1.6
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter3: Demand Analysis
Section: Chapter Questions
Problem 7E: In an attempt to increase revenues and profits, a firm is considering a 4 percent increase in price...
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3
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Until recently, Dave's Donuts sold their premium chocolate-cornflake-cronut for $3.75,
and they would sell 55 per week. Now, Dave has raised the price of the chocolate-
cornflake-cronut to $4.25, as a result, they are selling only 45 per week.
Using the midpoint rule, find the price elasticity of demand for the chocolate-cornflake-
cronut at Dave's Donuts. [a]
C
1.6
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Transcribed Image Text:#
3
e
d
Until recently, Dave's Donuts sold their premium chocolate-cornflake-cronut for $3.75,
and they would sell 55 per week. Now, Dave has raised the price of the chocolate-
cornflake-cronut to $4.25, as a result, they are selling only 45 per week.
Using the midpoint rule, find the price elasticity of demand for the chocolate-cornflake-
cronut at Dave's Donuts. [a]
C
1.6
$
4
r
f
V
%
5
t
5.0
g
Oll
^
6
b
y
hp
h
&
7
u
n
8
i
m
(
9
k
%
O
)
O
alt
р
Expert Solution
Step 1
Given:-
Initial price=$3.75
New price=$4.25
Initial quantity=55
New quantity=45
To calculate:-
Elasticity of demand using midpoint method=?
Please find detailed solution attached in next step
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