If Price Were Lowered from $10 to $8 and Quantity

question 92

Essay

If price were lowered from $10 to $8 and quantity demanded rose from 50 to 51,calculate elasticity;state whether demand is elastic,unit elastic,or inelastic;and find how much total revenue was when price was $10 and $8.

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Definitions:

Average Cost

A method of inventory valuation that calculates the cost of goods sold and ending inventory based on the weighted average of all units purchased.

Costing Method

a technique or methodology used to determine the cost associated with a production process or project.

LCM Approach

The Lower of Cost or Market method, an accounting principle requiring inventory to be recorded at either its historical cost or market value, whichever is lower, to reflect potential losses.