1. Last week, Cal sold an average of 4,000 gallons per day at an
average price of $2.658 per gallon. This week, he raised the
average price to $2.758 per gallon. His station is now selling an
average of 3,600 gallons per day. Fixed costs of operating the gas
station are $438 per day.
What is the price elasticity of demand?
Can the demand be characterized as price elastic, price inelastic,
or neither?
By how much did revenues increase or decrease as a result of the
change in price?
By how much did profits increase or decline? (Profit is revenue
minus total cost.)
Quantity Price
4000 2.658
3600 2.758
Average Average
?
?
% change % change Elasticity of
Demand
?
?
?
Elasticity: ?
By how much did revenues increase or decrease as a result of the
change in price?
By how much did profits increase or decline?
Gallons sold per day | Price | Revenue (price x gallons) | Cost per Gallon | Variable Cost (cost per unit x volume) | Fixed cost per day | Total Cost (Fixed + Variable) | Daily Profit (revenue - all costs) |
4000 $2.658
$10,632.00 $2.158 $8,632.00
$438.00 $9,070.00 $1,562.00
3600
1. Last week, Cal sold an average of 4,000 gallons per day at an average price...
A 1 B C D E F G 2. After seeing your analysis, Cal decides to lower the price of gas to $2.739 per gallon. After this change, the volume sold increased to 4,400 gallons per day. He asks you to measure his business gains or losses as a result of this price change. Fixed costs are $250 per day 2 3 Quantity 4400 4000 Average Price 2.739 2 749 Average What is the price elasticity of demand? Can the...
please help with question 1 please help with question 2 thanks A B C D E F G H I 23 24 1. Last week, Cal sold an average of 4,000 gallons per day at an average price of $2.749 per gallon. This 25 week, he raised the average price by 1 cent to $2.759 per gallon, and both revenues and profits dropped. 26 His station is now selling an average of 3,600 gallons per day. Fixed costs of operating...
please help with question 2. thanks 39 40 41 2. After seeing your analysis, Cal decides to lower the price of gas to $2.739 per gallon. After this change, 42 the volume sold increased to 4,400 gallons per day. He asks you to measure his business gains or losses as 43 a result of this price change. Fixed costs are $250 per day. 44 45 What is the price elasticity of demand? 46 Can the demand be characterized as price...
please help with question 3. I am attaching question #2's info below to help with question 3. Please layout in table format for question 3. thanks for your help. 889 3. After seeing the result (from question 2), Cal decided to lower his price once again to $2.729 per gallon. Once again, volume sold increases and settles at 4,800 gallons per day. He is worried that any further price cut will cause the discount station across the street to...
Cal Overhaut operates an ExxonMobil gas station franchise in Fitzhugh, MD. The price of gasoline is volatile and varies greatly from day to day. The price per gallon varies based on the seasonal blend of gasoline, which is determined by clean-air requirements, and Cal's pricing choices are limited to the profit margin for his price. Base price of unleaded regular delivered in New York harbor (Sept 2018 060 Added cost to Cal: 0.335 0.184 0.090 0.030 He recently raised the...
please help with question #1. please use % change in quantity divided by % change in price formula. thanks for your help. Cal Overhaut operates an ExxonMobil gas station franchise in Fitzhugh, MD. The price of gasoline is volatile and varies significantly from day to day. The price per gallon varies based on the seasonal blend of gasoline, which is determined by clean-air requirements. Cal's pricing options are based on the desired profit margin Conventional Gasoline Regular Spot Prices...
please help with question 1. please answer question in table format. thank you the website that was posted in the scenario is attached showing the price of gas in ny harbor. please help with question 1. Thanks BICI DEL G H I Cal Overhaut operates an ExxonMobil gas station franchise in Fitzhugh, MD. The price of gasoline is volatile and varies significantly from day to day. The price per gallon varies based on the seasonal blend of gasoline, which...
Cal Overhaut operates an ExxonMobil gas station franchise in Fitzhugh, MD. The price of gasoline is volatile and varies greatly from day to day. The price per gallon varies based on the seasonal blend of gasoline, which is determined by clean-air requirements, and Cal's pricing choices are limited to the profit margin for his price Base price of unleaded regular delivered in New York harbor (Sept 2018) Added cost to Cal: Maryland state gasoline tax Federal gasoline tax Delivery Advertising...
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