Coan Company Recently Changed the Selling Price of One of Its

question 46

Multiple Choice

Coan Company recently changed the selling price of one of its products. Data concerning sales for comparable periods before and after the price change are presented below. The product's variable cost is $21.40 per unit.
-The product's price elasticity of demand as defined in the text is closest to:

• A)-3.46
• B)-3.67
• C)-2.92
• D)-1.44

---

Definitions:

Marginal Cost

The increase in cost that arises from producing an additional unit of output.

Market Demand

The total quantity of a good or service that all consumers in a market are willing and able to buy at various prices.

Economic Profit

Economic profit is the total revenue of a company after subtracting both the explicit and implicit costs, including opportunity costs, reflecting the true profitability of a business.

ATC

Average Total Cost; it's the sum of all production costs divided by the quantity of output produced, representing the per-unit cost of production.