Recently, in Smalltown, the Price of Twinkies Fell from $0

question 111

Essay

Recently, in Smalltown, the price of Twinkies fell from $0.80 to $0.70. As a result, the quantity demanded of Ho-Ho's decreased from 120 to 100. What would be the appropriate elasticity to compute? Using the midpoint method, compute this elasticity. What does your answer tell you?

---

Definitions:

Salaried Estimator

A professional responsible for projecting costs and expenses, who is compensated with a fixed annual salary rather than hourly wages.

Break-Even

The point at which total costs equal total revenue, meaning no net loss or gain is incurred.

Common Fixed Expenses

Overhead costs that do not vary with production volume and are shared across different departments or products.

Break-Even

The point at which total revenues equal total costs, resulting in no profit or loss for the business.