Question 6 of 12 Mapoob Sapling Learning h scenario below gives some information

Question

Question 6 of 12 Mapoob Sapling Learning h scenario below gives some information about price elasticity of demand. For each, calculate the issing data, and determine if the price change under consideration will increase, decrease, or not change the firm's total revenue At Betty's Burgers, the hamburgers have a price elasticity of demand 2.05 If the number of burgers Betty sells has increased by 55.00%, she must have increase and Betty can expect her total revenue to O increased prices by Number O decreased O not change decrease Patty's Putts increased the price of a round of miniature golf by 26.0%. Patty has calculated her price elasticity of demand at 0.27. She can expect the number of golfers O decrease by Number and total revenue to decrease increase increase O not change

Explanation / Answer

Here at Betty's Burgers, the hamburger has a price elasticity of demand= 2.05 that is demand is elastic.

Elasticity=(% Change in quantity)/(% Change in price)

2.05=55/(% change in price)

% change in price=26.83%

Therefore, she must have decreased price by 26.83% and Betty can expect her total revenue to increase

Here elasticity is 0.27 which is inelastic.

0.27=(% change in quantity)/26

% change in quantity=7%

Therefore she can expect the number of golfers to decrease by 7% and total revenue to increase.

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