imperfect competitive market

Not what you're looking for? Search our solutions OR ask your own Custom question.

This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

In the imperfect competitive market of jeans, Lean Jeans, Inc., recently offered rebates of $1 off the regular $50 price. Quantity sold jumped 4 more jeans from the previous 100 figure the previous month.

A. Calculate the arc price elasticity of demand for Lean Jeans.

Based on the previous question and using markup pricing,
B) If marginal cost per unit is $20, was the original $50 price optimal?

C) What would be the optimum price?

© BrainMass Inc. brainmass.com December 15, 2022, 7:58 pm ad1c9bdddf
https://brainmass.com/economics/demand-supply/imperfect-competitive-market-263426

Solution Preview

A. Given that there was a rebate of $1 off the regular price of $50, we can use the elasticity of demand formula to find the price elasticity of demand.

Price Elasticity of Demand = (% Change in Quantity)/(% Change in Price)

There are two ways to calculate this, the first is:

Price Elasticity of Demand = ...

Solution Summary

The optimum price is determined for an imperfect competitive market.

$2.49