The Dixie Chicken currently sells 3,000 burger platters per month for $8, and the own-price elasticity for this platter has been estimated to be -1.25. If Dixie Chicken raises prices by 75 cents, how many platters will be sold?
The Dixie Chicken currently sells 3,000 burger platters per month for $8, and the own-price elasticity for this platter has been estimated to be -1.25. If Dixie Chicken raises prices by 75 cents, how many platters will be sold?
Micro Economics For Today
10th Edition
ISBN:9781337613064
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter5: Price Elasticity Of Demand And Supply
Section: Chapter Questions
Problem 16SQ
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Question
The Dixie Chicken currently sells 3,000 burger platters per month for $8, and the own-
elasticity for this platter has been estimated to be -1.25. If Dixie Chicken raises prices by 75
cents, how many platters will be sold? Round to the nearest whole number.
Expert Solution
Step 1
Price elasticity of demand (Ed) depicts the nature of responsiveness of the quantity demanded (Q) of a good or service to a change in its price (P). It is calculated as the percentage (%) change in Q divided by the percentage (%) change in P.
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