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  1. You sell car insurance to low-income consumers. You have the cheapest rates in Texas—just $30 per month—and you have 100,000 identical customers. You estimate that the price elasticity of demand for your insurance is - 0.1.

________ a. If you raise your prices by 10% or $3 what percent of your customers will you lose?

________ b. How many customers will you lose?

________ c. Your total monthly revenue will change by what percent? (Include + or – sign.)

________ d. Your total monthly revenue will change by what $ amount? (Include + or – sign.)

Koolakuf_DR
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  • Have you looked up the definition of price elasticity of demand? What did you find? You need to plug the given values into the definition to answer these. – Ross Millikan Aug 30 '18 at 22:45

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