Question #24316
. Suppose the price elasticity of demand for bouquets of flowers is 4.0. You are charging $8
per bouquet. If you want to increase the quantity of bouquets you sell by 20 percent,
what price should you charge? (Hint: find the percentage price change first)
per bouquet. If you want to increase the quantity of bouquets you sell by 20 percent,
what price should you charge? (Hint: find the percentage price change first)
Expert's answer
Ed = changeQ/changeP
If you want to increase the quantity of bouquets you sell by 20 percent,
you should increase your price by 20/4 = 5%,
$8*1.05 = $8.4
If you want to increase the quantity of bouquets you sell by 20 percent,
you should increase your price by 20/4 = 5%,
$8*1.05 = $8.4
