answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Vikentia [17]
2 years ago
12

The Acmeville Metropolitan Bus Service currently charges $0.88 for an all-day ticket and is used by an average of 513 riders a d

ay. The bus company is not earning a profit, but according to their contract with the city, they cannot cut the number of buses on the road. They must, therefore, find a way to increase revenues. The bus company is considering increasing the ticket price to $0.99 . The marketing department's studies indicate this price increase would reduce usage to 363 riders per day. Calculate the price elasticity of demand using the midpoint method for bus tickets to determine if the bus company should increase price or decrease price to increase revenues. Enter your answer as an absolute value and round it to two places after the decimal. price elasticity of demand: Determine if demand is elastic or inelastic and what this implies regarding how ticket prices affect revenue. Demand is inelastic, so increasing ticket prices will increase revenue. Demand is inelastic, so decreasing ticket prices will increase revenue. Demand is elastic, so increasing ticket prices will increase revenue. Demand is elastic, so decreasing ticket prices will increase revenue.
Business
1 answer:
ki77a [65]2 years ago
6 0

Answer:

Price elasticity of demand = Change in Quantity/ Change in Price

Using midpoint formula;

Change in Quantity ;

= \frac{Q2 - Q1}{\frac{Q1 + Q2}{2} } \\\\= \frac{363 - 513}{\frac{513 + 363}{2} }\\\\= -0.342

Change in Price;

= \frac{P2 - P1}{\frac{P1 + P2}{2} } \\\\= \frac{0.99 - 0.88}{\frac{0.99 + 0.88}{2} }\\\\= 0.118

Price elasticity of demand = -0.342/0.118

= -2.90

Demand is elastic, so decreasing ticket prices will increase revenue.

When the elasticity is larger than 1 it means that a 1% change in price will change demand by more than 1%. In this case, a a decrease of price by 1% will bring 2.9% increase in customers.

You might be interested in
2019,Do you think leadership style is fixed and unchangeable, or can leaders be flexible and adaptable with respect to style? Wh
Anna71 [15]

Answer:

No. I do not think leadership style is fixed.

Explanation:

There are various leadership styles used by leaders in organizations depending on the type of job, the category of employees, the situation, or the organizational goal the leader is trying to achieve.

Some of these leadership styles include; bureaucratic, democratic, autocratic, servant and transactional leadership styles.

It is best for leaders to be flexible and know what style to adopt depending on the particular situation.

For example, in <u>situations where employees are inexperienced</u>, a leader should choose a leadership style (such as bureaucratic leadership) where he gives instructions and directs the employees on what to do.

If on the other hand, such a l<u>eader is in charge of experienced employees</u>, then he can adopt the democratic style of leadership, where the employees are allowed to give inputs and have freedom to make certain decisions.

7 0
2 years ago
Last year Electric Autos had sales of $175 million and assets at the start of the year of $300 million. If its return on start-o
nalin [4]

Answer:

Operating profit margin = 25.71%

Explanation:

Amount of return on asset = Rate of return x Asset value

Amount of return on asset = 15% x $300,000,000

Amount of return on asset = $45,000,000

Operating profit margin = Amount of return on asset / Sales

Operating profit margin = $45,000,000 / $175,000,000

Operating profit margin = 0.257143

Operating profit margin = 25.71%

5 0
2 years ago
You dream that you win $20 million in the state lottery. the next morning you find a $20 bill lying on the sidewalk. if you were
dimulka [17.4K]
The fallacy of positive instances
5 0
2 years ago
Read 2 more answers
An organizationally-driven reason for outsourcing is that it can improve effectiveness by focusing on what the firm does best.
VARVARA [1.3K]

Answer:

True

Explanation:

Outsourcing is when a company gives some of its internal activities to an external party that takes the responsibility to get things done and one of the reasons for a company to do this is to get rid of activities that have to get done but that are not part of their core operations to be able to concentrate on their main activity and get those things done by experts which can help increase productivity. According to that, the answer is that the statement is true.

6 0
2 years ago
A budget deficit a. changes the supply of loanable funds. b. changes the demand for loanable funds. c. changes both the supply o
Nadya [2.5K]

Answer:

C. changes both the supply of and demand for loanable funds.

Explanation:

A budget deficit is when expenses exceed revenue and denotes the financial capability of a country.

In the presence of a deficit, the demand for loanable funds will increase because the government moves towards lending money. Deficits decrease the supply of loanable funds while surpluses increase the supply of loanable funds. So, both supply and demand of loanable funds are affected by budget deficit.

8 0
2 years ago
Other questions:
  • Cadion co. owned a controlling interest in knieval inc. cadion reported sales of $420,000 during 2011 while knieval reported $28
    10·1 answer
  • Greta has a good credit rating and is considering taking out a car loan. Which of the following questions will help her make the
    8·1 answer
  • A manager that primarily focuses on the shareholders of the corporation rather than all of the vested parties in the businesses
    13·2 answers
  • Indirect costs incurred in a manufacturing environment that cannot be traced directly to a product are treated as a.period costs
    8·1 answer
  • A company has a "bring your own device" (BYOD) policy for computers; anyone can just go out and buy whatever computer they want.
    15·1 answer
  • What common factor turned all four products into “hot” toys
    8·1 answer
  • Use the following data to compute the present value of the terminal period ROPI for each of the four firms A through D. Assume a
    10·1 answer
  • Henry, a trainer at MyChem Inc., schedules training on handling hazardous chemicals for a group of newly hired employees. The tr
    15·1 answer
  • Rhys Hoskins is the president of RH Corporation (RHC). RHC has provided the following partial listing of costs incurred during A
    12·1 answer
  • (a) what was the opportunity cost of non-gm food for many buyers before 2008?
    13·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!