question archive XYZ Hamburgers operates near a college campus
XYZ Hamburgers operates near a college campus
Subject:EconomicsPrice:2.88 Bought3
XYZ Hamburgers operates near a college campus. Stan of XYZ has been selling 120 hamburgers a day at $4.50 each and is considering a price cut. He estimates that he would be able to sell 240 hamburgers per day at $3.50 each.
a. Calculate the price elasticity of demand using the arc/midpoint formula.
b. Calculate the change in revenue as a result of the price cut.
