Seasons Four Equipment Corporation Sells 200 Riding Lawn Mowers Per

question 9

Essay

Seasons Four Equipment Corporation sells 200 riding lawn mowers per month at a sales price of $1,800 each. Overall, mower demand is described by the price equation: P = 2,600 - 4Q, where P is the price of a mower and Q is the quantity of mowers demanded. The firm's estimated marginal cost is $1,000 per mower. The head of marketing points out that mower demand is quite elastic at the current $1,800 price. Therefore, he recommends cutting price in order to increase revenue and profit. Compute the point price elasticity for mower. Is the marketing chief correct?

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Definitions:

Seatbelt

A safety device in vehicles designed to secure the occupant against harmful movement that may result during a collision or a sudden stop.

Uterus

The female reproductive organ where a fertilized egg implants and develops into a fetus during pregnancy.

Shoulder Strap

A part of clothing or accessories that goes over the shoulder to support the garment or item being carried.

Preeclampsia

A condition during pregnancy marked by elevated blood pressure and evidence of harm to another organ system, typically the liver and kidneys.