1. A recent input price increase has John worried about his profitability. He would like to pass on the increase to his customers, but he doesnâ??t want to take a hit on his total revenue. Last year, when a similar situation came about, John did pass the increase on with the following results: Original Price of Product =
Arc Price Elasticity. Assume that amazon.com cut the price on a 1.10 ct Princess Cut Diamond Solitaire engagement ring from $4,500 to $2,500, and sales rose from 50 to 75 units per week. A. Calculate the implied arc price elasticity of demand. B. Is a further price decrease warranted? Why or why not?
Optimal Price. Last month, Rick's Bike Shop, Inc. increased the price on the 24 ounce can of bearing grease by 1%. In response, sales dropped by 4%. A. Calculate the point price elasticity of demand for bearing grease. B. Calculate the optimal price for bearing grease if marginal cost is $4.50 per unit.
The California Instruments Corporation, a producer of electronic equipment, makes pocket calculators in a plant that is run autonomously. The plant has a capacity output of 200,000 calculators per year, and the plant's manager regards 75 percent of capacity as the normal or standard output. The projected total variable costs fo
Please see attached DOC and help to choose the correct answer.
1. Use the cost table below to answer the following questions. (Note: You cannot match up price exactly with the appropriate item. Choose the one that comes most nearly.) Total Total Average Fixed Variable Total Total Marginal Quantity Cost Cost Cost
1. If a 1% fall in the price of a product cause the quantity demanded of the product to increase by 2%, demand is (a) inelastic (b)elastic (C) unit elastic (D) perfectly elastic 2.The minimum acceptable price for a product that Juan is willing to receive is $20. It is $15 for Carlos. The actual price they receive is $2
1. Read the attached New York Times article â??With Fare Up, Subway Use Drops Sharply.â? a. Use the data in the article to estimate the price elasticity of demand for subway rides (use the midpoint method). b. According to your estimate, what happens to the Transit Authorityâ??s revenue when the fare rises? c. Do you t
Instead of going to work one morning, Ellen decides to go to the doctor for a 10-minute office visit. It will take her 15 minutes to travel each way, 20 minutes to wait in the office, and 10 minutes with the doctor. The money cost of the visit is $25. Her hourly wage is $10. travel (gas) and parking is $5. Show your work on
A state owned company is providing electricity at the price of $0.105and faces the demand for electricity P=1.255-0.001Q. The company has a cost function C(Q)=100.625+0.105Q. The state sells the firm, now the firm's only goal is profit maximization. a. What is the number of kilowatt hours of electricity produced and what is
Use the following to answer a-e. Please show all work in as much detail as possible. Assume Q is the quantity demanded for medical care services. The linear industry demand function takes the form Q = a +bp +cM +dPr where: P = the price of the medical care M = median household income Pr = the price of a related good
How does a business determine whether to increase or decrease the price of the product it sells in order to increase revenue? Explain how the pricing decisions are made based on the type of elasticity.
Why is it wiser for the government to put a sales tax on a good that is demand inelastic than on one that is demand elastic?
Q. The services of a certified psychologist cost $110 per hour, and an extended health plan covers 50% of that cost. Under the plan, the clients covered used 625 hours of this service in a typical 3 month period. To save money, the extended health plan reduced its coverage to 40% of the cost. As a result, the clients covered red
Suppose that during a given year: (1) the price of TV sets increases by 4 percent in Japan, (2) the dollar depreciates by 5 percent with respect to the yen (the Japanese currency), (3) consumer incomes in the United States increase by 3 percent, (4) the price elasticity of demand for imported TV sets in the United States is -1.5
1. If the price of jeans rises and the quantity sold also rises, does this mean that the demand curve slopes upward? Why or why not? 2. If the prices of most goods are rising by an average of 15 percent per year, but the price of gasoline rises just 10 percent per year, what is happening to the real prices of gasoline and how
Given each of the following price elasticities, determine whether marginal revenue is positive, negative, or zero. -5, -1, -0.5
1.Calculate the price elasticity of demand when the price of milk increases from $2.25 to $2.50 per gallon and the quantity of milk demanded falls from 100 to 90 gallons. Use the method for calculating price elasticity found in your text. Do NOT include any symbols other than a negative sign or decimal point in your answer. If
Just 1 or 2 sentence needed to answer the following question Explain why the demand curve facing a monopolist is less elastic than one facing a firm that operates in a monopolistically competitive market. ( all other factors held constant)
The following is a straight-line demand curve: Price Quantity Demanded $12 1 10 2 8 3 6 4 4 5 a) Calculate the elasticity of demand in going
College students -0.906 to -1.309 Secondary school students -0.846 to -1.450 Adults, long-run, permanent change in price -0.75 Adults, short-run, permanent change in price -0.40 Adults, temporary change in price -0.30 Based on the data above, discuss why public health officials generally advocate the us
A monopolist sells in both Milwaukee and Cleveland and has identical marginal costs of 8 in each market. If the elasticity of demand in Milwaukee is -5 and in Cleveland is -2 what are the profit-maximizing prices in each market? If the product can be easily shipped from one city to the other at a cost of 2 per unit, would this c
Prepare an analysis by answering the questions below. Be sure to cite your references using APA format. Demand Schedule for Barbeque Dinners Price Quantity Demanded Total Revenue Elasticity Coefficient Elastic or Inelastic $4 100 __________ XXXX XXXX 6 80 __________ __________ __________
The Future Flight Corporation manufactures a variety of frisbees selling for $2.98 each. Sales have averaged 10,000 units per month during the last year. Recently Future Flight's closest competitor, Soaring Free Company, cut its prices on similar frisbees from $3.49 to $2.59. Future Flight noticed that its sales declined to 8,00
A baseball team is trying to predict ticket sales for the upcoming season. They are also considering increasing prices. aâ?"the elasticity of ticket sales with respect to the size of the population is estimated to about 0.7. iâ?"briefly explain what this number means? iiâ?"If the local population increases from 60
The British Automobile Company is introducing a brand new model called the "London Special." Using the latest forecasting techniques, BAC economists have developed the following demand function for the "London Special": Qd = 1,200,000 - 40P What is the point price elasticity of demand at prices of: a. $8000 b. $10,000
You are the owner of a local Saturn dealership that competes against two other firms (Ford and Chrysler dealerships) Unlike other dealerships in the area, you take pride in your â??No Hassles, No Haggleâ? sales policy. Last year, your dealership earned record profits of $1.5 million. However, according to the local Chamber
FIRST QUESTION Assuming the price elasticity of a companyâ??s product is between -0.3 and -0.4 and the income elasticity of demand is 0.5: 1. Determine the effects a 15% price increase would have on the demand for the product 2. Determine the effect a 50% increase in income would have on the demand for the product SECOND
Given the same price elasticity of supply, sellers would be able to pass along the smalles portion of a 10%tax on which item? Beef with a price elasticity of demand of .62 Pork with a price elasticity of demand of .73 Chicken with a price elasticity of demand of .32 Fish with a price elasticity of demand of .12
1. Explain how Demand, Elasticity, and Total Revenue are all related to each other. Explain this relationship using at least two examples that incorporates all three concepts. Use examples and references from texts, Web sites, and other references or from personal experience, in answering this question. 2. Trade restrictions