The Price Elasticity of Demand for Rosie's Roses Fresh Flowers

question 33

Multiple Choice

The price elasticity of demand for Rosie's Roses fresh flowers the week of Valentine's Day is 1.10 and is 1.60 other days of the year. If Rosie's Roses faces a constant marginal cost of $0.75 per rose, what is the profit- maximizing off- peak load price to charge on days not on the week of Valentine's Day?

• A)$1.25
• B)$8.50
• C)$2.00
• D)$5.00

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Definitions:

Variance

A measure of how much values in a data set differ from the mean of the data set.

Null Hypothesis

A statistical hypothesis that assumes no significant difference or relationship exists between certain characteristics or variables.

One-way ANOVA

A statistical test that compares the means of three or more independent groups using variance analysis.