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Demand & Supply

Demand Curve: Haircuts

The demand curve for haircuts at Terry Bernard's Hair Design is P = 20 - 0.2Q, where Q is the number of cuts per week. a. Should Terry raise the price of haircuts above its current $15 if he wants to increase revenue? Why or why not? b. Use calculus to find the number of haircuts that maximizes total revenue. What price would

Increase or Decrease in Demand

Determine if, for the good marked with ALL CAP lettering, if there is an increase or decrease in demand. A. A new fashion trend dictates the wearing of KILTS. B. The price of APPLES. C. The price of Pepsi, a substitute for COKE, increases. D. The price of DOG FOOD increases. E. The consumers start liking MINIVANS all of a s

Demand and Supply - Fixed Cost

Complete the following table. What is the value of fixed cost? Output Total Cost Marginal Cost Average Cost 0 $100 1 $110 2 $130 3 $165 4 $220 5 $300 On a graph, depict marginal cost and average cost using the data from above. Indicate minimum average cost on the graph.

Price Elasticity of Demand: Graph and Analysis

The following is a demand schedule for shoes: Price: $100 ; $80 ; $60 ; $40 ; $20 Quantity: 10 ; 14 ; 18 ; 22 ; 26 A) Illustrate the demand curve. B) How much will consumers spend on shoes at a price of $80? C) As price drops from $100 to $80, is the demand elastic or inelastic? Show yo

Calculate the equilibrium parameters in the given cases.

Price per gallon $2.00 2.25 2.50 2.75 3.00 3.25 3.50 Quantity demanded 26 25 24 23 22 21 20 Quantity supplied 16 20 24 28 32 36 40 (a) What is the equilibrium? (b) If supply at every price is reduced by 10 gallons, what will the new equilibrium price be? (

Price Elasticity of Demand Exercise

Help me with the following elasticity exercise, using the table attached for the data. Determine: I. The price-elasticity of demand coefficient. Ii. The name as elastic, inelastic, unitary, perfectly elastic or perfectly inelastic. Iii. The type of good as luxury or necessity. Iv. The change in total revenue or total ex

Financial Statements: Analyzing Transactions

A major supplier has donated $45,000 worth of medical supply items to your firm. These items are then used in the treatment of patients. Explain how this transaction would be recorded in your firm's financial statements. Additionally, your hospital has experienced negative levels of net income for the last five years. The total

Standard Deviation of Return

The expected returns earned from investment in the stock of two companies, Company A and Company B, are shown in the following table. Use the table to complete parts (a) through (e) below. Demand for Product Probability of Demand Expected Return: Stock A Expected Return: Stock B Strong 0.3 40% 20% Normal 0.45 20%

Reversed Causality - Examining the Facts

A hypothetical study examines the operations of a couple of hundreds medical clinics, with the data for the amount of expenses for new medical equipment relative to the total expenses in a particular year(s), and the amount of revenue per physician in subsequent years. The study finds that the more a clinic spends for new equi

Calculating the Increase in Chocolate Syrup Sales

A grocery store notices that the cross-price elasticity between ice cream and chocolate syrup is -.3. The store is advertising a sale with ice cream prices reduced by 20%. By how much should they expect chocolate syrup sales to increase?

Economics from a Health Care Perspective

What incentives does a capitates physician have to keep his patients happy? What incentive does an FFS physician have? If Mr. Jones is a cranky old man who smokes and drinks so much that his liver and other organs are going downhill, which payment system provides more incentive to keep Mr. Jones satisfied? Which provides the mos


A television show called 'Extreme Couponning' features people who go to extreme lengths to collect and use discount coupons. Though the program focuses on extreme cases, couponning is a popular strategy used by businesses to generate sales. What key economic concepts underlie the use of discount coupons by businesses?

Cross Elasticity of Demand

Both SmithCo and Jones Inc. sell widgets. SmithCo's sales last month equaled 1000 units and it charged a price of $2. This month Jones Inc. reduced the price it sells its brand of widgets from $2.10 to $2, and SmithCo saw a reduction in the quantity of widgets is sold, down to 900 units. What is the cross elasticity of demand be

Calculate the profits with and without third degree discrimination.

Cinema Theater has estimated the following demand functions for its movies: Daytime demand, QD = 400 - 50 PD Nighttime demand, QN = 200 - 20 PN The marginal cost of serving another customer is $5 and its fixed costs are $100. a. If the theater uses third degree price discrimination, what price will it charge for day

Cross Elasticity of Demand

Both SmithCo and Jones Inc. sell widgets. SmithCo's sales last month equaled 1000 units and it charged a price of $2. This month Jones Inc. reduced the price it sells its brand of widgets from $2.10 to $2, and SmithCo saw a reduction in the quantity of widgets is sold, down to 900 units. What is the cross elasticity of demand be

Product Features in Advertising

It is important for organizations to determine product features and the use of advertising if using price to compete is not an option. Choose an organization not previously selected by another student and provide a recommendation to the organization on the use of product differentiation as a means of competition. Create a list o

Price Elasticity for Wal-Mart's Decision

This was a post that you created earlier. I related it to Walmart. My followup question is: What does this decision by Wal-mart tell you about the price elasticity of the demand curve that it faces? There are many ways that organizations can use to increase revenue. One of the ways is to increase the price of an item. This

Managed Care Types of Incentives

- What are some the types of incentives for providers for efficiency in the delivery of healthcare services. Explain who bears the financial risk, the provider, the patient, or the managed care organization? - Explain the types of incentives for providers for efficiency in the delivery of healthcare services.

supply and demand affect equilibrium price and quantity

Assume that the market for radios is perfectly competitive and there is a simultaneous increase in supply and demand. What can be said about the new equilibrium relative to the one before the shifts in supply and demand occurred? A. An increase in equilibrium price and quantity B. A decrease in equilibrium price and qua

Walmart Product Analysis

What kind of demand does Walmart's products have? Does it vary by season? Also, what market segment does Walmart target?

Capital Structure

Suppose that Ms. Macbeth's investment bankers have informed her that since the new issue of debt is risky, debt-holders will demand a return of 12.5% which is 2.5% above the risk free rate of interest. What are r(A) and r(E)? Suppose that the beta of the unleveraged stock was .6. What will B(A), B(E), and B(D) be after the ch

Demand elasticity for CO2 abatement and life cycle analysis

A government wants to institute a hybrid car rebate of $3000 per car for hybrids that average $25,000 in price and get 45 mpg. Consumers are currently purchasing 750,000 of these hybrids annually. The demand elasticity of hybrid cars is 1.2. How much does it cost the government for every metric ton of carbon not emitted into the

Demand for the services of Derek Jeter is?

1.) Demand for the services of Derek Jeter is? a) horizontal. b) unrelated to his true productivity. c) an output demand. d) derived from the demand for Yankee's tickets when Jeter plays. 2.) Total cost is calculated as? a) the sum of total fixed cost and total variable cost. b) the product of average total cost an

Supple curve

Consider the relationship given by QCars = 100 + 4xPCars - 2xPSteel - 0.2xPWorkers, where QCars is the quantity of cars (in thousands), PCars is the price of cars and PWorkers is the wage earned by autoworkers. If the price of steel is $10 per unit and the price of workers (the wage) is $20, what is the supply curve for cars?

Calculating the revenue maximizing price

If the demand for the Chicago Expressway is: P = 800 - 0.16Q If P = $2, What is the Quantity Demanded? At what price quantity point does this demand curve have a price elasticity of -1? If the goal of the transit authority was to maximize total revenues, what is the new price it should set? Also, what would the t

Market equilibrium price and quantity (in the short run)

Please help with the following problem. For each of the following changes, show/describe the effect on the DEMAND CURVE and state what will happen to market equilibrium price and quantity (in the short run). a. Consumers expect that the price of the good will be higher in the future. b. The price of a substitute good ris

Consummate and Calculated Risk

The United States is known for its consummate "risk-takers". Research the concept of "calculated risk" at this web site ( ) or any others, and address the following: ? Describe an example of risk calculation found on the web. ? What risk calculation technique is illustrated by your