Answer the following questions using the information below:
LeBlanc Lighting manufactures table lamps and is considering raising the price by $15 a unit for the coming year.With a $15 price increase,demand is expected to fall by 2500 units.
$$\begin{array} { l r r }
& \text { Current } & \text { Projected } \
\text { Demand }& 20000 \text { urits } & 17500 \text { urits } \
\text { Selling price }& \$ 150 & \$ 165 \
\text { Variable costs per unit } & \$ 100 & \$ 100
\end{array}$$

-The demand for this product is:
A)elastic.
B)greatly inelastic.
C)slightly inelastic.
D)indeterminable.

Question

Answer the following questions using the information below:
LeBlanc Lighting manufactures table lamps and is considering raising the price by $15 a unit for the coming year.With a $15 price increase,demand is expected to fall by 2500 units.
 $$\begin{array} { l r r } 
 & \text { Current } & \text { Projected } \
 \text { Demand }& 20000 \text { urits } & 17500 \text { urits } \
\text { Selling price }& \$ 150 & \$ 165 \
\text { Variable costs per unit } & \$ 100 & \$ 100
\end{array}$$

-The demand for this product is:
A)elastic.
B)greatly inelastic.
C)slightly inelastic.
D)indeterminable.

Quizplus · Accepted Answer

The fact that a small price increase of $15 results in a significant decrease of 2500 units indicates that demand for the product is elastic. A more inelastic demand would result in a smaller decrease in demand with the same price increase.

Answer the Following Questions Using the Information Below: LeBlanc Lighting

Answer the Following Questions Using the Information Below:
LeBlanc Lighting