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Blu-Rays can be produced at a constant marginal cost of $5 per disk, and Superhero Studios is releasing the Blu-Rays for its last two major films. The Blu-Ray for Obscure-Man is priced at $20 per disk,
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16 votes
Blu-Rays can be produced at a constant marginal cost of $5 per disk, and Superhero Studios is releasing the Blu-Rays for its last two major films. The Blu-Ray for Obscure-Man is priced at $20 per disk, and the Blu-Ray for Team-Up Flick 17: The Final Chapter, Part 1 is priced at $30 per disk. What are the price elasticities of demand for these two movies

User Maria Sakharova
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1 Answer

12 votes
12 votes

Answer:

  • Obscure-Man = -1.33
  • Team-Up Flick 17: The Final Chapter, Part 1 = -1.2

Step-by-step explanation:

Price elasticity based on the variables given here, can be calculated using the formula:

= Price / (Marginal cost - Price)

Obscure-Man:

= 20/ (5 - 20)

= -1.33

Team-Up Flick 17: The Final Chapter, Part 1:

= 30 / (5 - 30)

= -1.2

User Fbm
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