Question

Question 2 (10 marks) In 2019, ABC Company, the largest company in the funeral business with 14% of total industry revenue, saw its average revenue per service (its product price) rise by 9 percent. At the same time, the number of funeral services performed fell by 5.8 percent. We can thus calculate the price elasticity of demand for its services directly as -(5.8/9) = -0.64. Its price and quantity demanded last year suggest that its demand is inelastic— and we thus know from this calculation that its total revenue from theseservices increased. What should ABC Company do if it wants to raise its total revenue still further?​

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w28u27wu2ue773h3Your sister is a dentist and works at the National Institute of Dental Caring. She withdraws a monthly salary of Rs. 50,000. Your father advises her to open her own clinic, she estimates that it would cost Rs. 5,00,000 per year to rent the location and other expenses. What is your sister’s opportunity cost of running her own clinic for a year? If your sister thinks she can earn Rs. 10,00,000 from her patients in a year, should she open the clinic?explain