Details: You are a painter, and the price of a gallon of paint increases from $3.00 a gallon to $3.50 a gallon. Your usage of paint drops from 35 gallons a month to 20 gallons a month. Perform the following: 1.Compute the price elasticity of demand for paint and show your calculations. 2.Decide whether the demand for paint
Suppose that families with children ages 6-12 years old and families with children ages 15-21 years old have the following demand for tickets to Disney World. (10 points) Quantity Demanded/Week Quantity Demanded/Week Price per Ticket (families with 6-12 year olds) (families wit
Price Elasticity Briefly describe how knowledge of price elasticity among different groups of customers or for various products enable managers to price discriminate, or change different prices for these groups.
Jim owns and manages a Dine-In Barbeque Restaurant. He has been in business for over 10 years and his restaurant has a steady patronage. Consider how each of the following scenarios impacts the market for Jim's product. You need to state whether the scenario will impact the industry demand curve or supply curve and state the
1) Your boss, the mayor of a city, thought that she'd come up with a great way to raise city revenue: increase the tax on gasoline in the city! However, she discovered that the city was actually receiving less tax revenue after the gas tax increase than before. Incensed, she declared that the economic policy prescription of taxi
Assume the cross price elasticity of demand between peanut butter and grape jelly is negative. A. Does the cross price elasticity coefficient indicate that peanut butter and grape jelly are substitutes or complements? Why? B. Describe the effect associated with an increase in the price of peanut butter on the demand for b
A. Calculate the cross-price elasticity of demand coefficient of a firm's product X, given that a 5% increase in the price of its close substitute, product Y, causes the quantity demand of product X to increase by 10%. B.Calculate the income-elasticity of demand coefficient for a product for which a 4% increase in consumers
Starting with the date from Problem 6 and the data on the price of a related commodity for the years 1986 to 2005 given below, we estimated the regression for the quantity demanded of a commodity (which we now relabel Q Ì?_x), on the price commodity which we now label P_x, consumer income ( which we now label Y), and the price
In an article about the financial problems of USA Today, Newsweek reported that the paper was losing about $20 million a year. A Wall Street analyst said that the paper should raise its price from 50 cents to 75 cents, which he estimated would bring in an additional $65 million per year. The paper's publisher rejected the idea
The total operating revenues of a public transportation authority are $100 million while its total operating costs are $120 million. The price of a ride is $1, and the price elasticity of demand for public transportation has been estimated to be -0.4. By law, the public transportation authority must take steps to eliminate its o
Revenue at a major cellular telephone manufacturer was $1.4 billion for the nine months ending March 2, up 97 percent over revenues for the same period last year. Management attributes the increase in revenues to a 137 percent increase in shipments, despite a 17 percent drop in the average blended selling price of its line of p
A number of empirical studies of automobile demand yielded the following estimates of income and price elasticities Study Income elasticity Price elasticity Chow +3.0 -1.2 alkinson +2
You are the specific-area sales manager for a national company that provides, among other things, cable television service. Using monthly data for the number of subscriptions, prices, incomes, and prices of related goods for two full years (i.e., 24 months), you estimate demand for your company's high-definition television (HDTV
Elasticity and marginal revenue here is some data on the demand for marshmallows price quantity $10 100 8 300 6 700 4 1300 2 2200 is demand elastic or inelastic in the $ 4 - $6
Need in answering the attached problems...
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 =
I need to know what price elasticity of demand and economies of scale are and their effects on mass production
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
No Plagarism please, list references if needed There are 4 factors that influence the price elasticity of demand: â?¢The availability of substitutes â?¢The specific nature of the good â?¢The part of income spent on the good â?¢The time consumers have to buy the good â?¢Choose a product you have purchased i
4. You are the chairperson of a state tax commission responsible for establishing a program to raise new revenue through exercise taxes. Why would elasticity of demand be important to you in determining the products on which the taxes should be levied? 5. How would the following changes in price affect total revenue? That
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.