(Figure: IPod Consumers) a Local Electronics Store Sells IPods for $100

question 69

Essay

(Figure: iPod Consumers) A local electronics store sells iPods for $100 per unit. The manager who took a lesson from his economics course in college decides to offer a 20 percent discount to students who can present their current student ID at purchase. Given the demand curves for regular and student customers, answer the following questions. Figure: iPod Consumers a. What will be the total revenue for both groups of customers if the store offers the discount? b. For which group of customers is the demand more elastic? c. What is the elasticity of demand between the prices of $100 and $80 in the regular market? d. What is the elasticity of demand between the prices of $100 and $80 in the student market? e. If the manager increases the regular price of iPods to $120 and lowers the discount price to $70, how much could the store increase total revenues?

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Definitions:

Numerical Index

A numerical representation or measurement, often used for comparing statistical data, assessing performance, or tracking changes over time.

Normally Distributed

Describes a statistical distribution where data points are symmetrically distributed around the mean, forming a bell-shaped curve.

Percentage

A portion of a whole expressed as a fraction of 100, used in quantifying proportions and ratios.

Descriptive Statistics

Statistical methods that summarize and organize data collected from a sample or population, including measures such as mean, median, and standard deviation.