Jessica simpson sets up shop to sell "buffalo wings." she observes that if the price drops from $3.50 per order to $2.50 per order, her daily sales rise from 300 to 500 orders.

a. what is the price elasticity of demand for jessica’s "buffalo wings? "

b. which price yields the greater total revenue?

c. jessica is considering adding a new product, widgets, to the menu. she has experimented and discovered that a 10% increase in the price of wings causes a 20% increase in the quantity of widgets sold. what is the cross elasticity of demand between widgets and wings? are they complements or substitutes? ?

d. what is the difference between the price elasticity of demand and the slope of the demand curve? are they the same concept? are they even related concepts?

Suppose that fizzo and pop hop are the only two firms that sell orange soda. the following payoff matrix shows the profit (in millions of dollars) each company will earn depending on whether or not it advertises: pop hopadvertise doesn’t advertisefizzo advertise 10, 10 18, 2doesn’t advertise 2, 18 11, 11for example, the upper right cell shows that if fizzo advertises and pop hop doesn't advertise, fizzo will make a profit of $18 million, and pop hop will make a profit of $2 million. assume this is a simultaneous game and that fizzo and pop hop are both profit-maximizing firms. if fizzo decides to advertise, it will earn a profit if pop hop advertises and a profit if pop hop does not advertise. if fizzo decides not to advertise, it will earn a profit if pop hop advertises and a profit if pop hop does not advertise. if pop hop advertises, fizzo makes a higher profit if it chooses (not to advertise, to .if pop hop doesn't advertise, fizzo makes a higher profit if it chooses (not to advertise, to . suppose that both firms start off not advertising. if the firms act independently, what strategies will they end up choosing? fizzo will choose to advertise and pop hop will choose not to advertise. both firms will choose to advertise. fizzo will choose not to advertise and pop hop will choose to advertise. both firms will choose not to advertise. again, suppose that both firms start off not advertising. if the firms decide to collude, what strategies will they end up choosing? fizzo will choose not to advertise and pop hop will choose to advertise. both firms will choose not to advertise. fizzo will choose to advertise and pop hop will choose not to advertise. both firms will choose to advertise.