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Elasticity

Use Arc formula elasticity of demand.

ABC, Inc sells it toys for $15 with a sales volume of 30,000 units per quarter. Assume the price elasticity coefficient is -0.5 and ABC, Inc raises the price to $16 in anticipation of the Christmas season. Estimated 4th quarter sales volume will be? Use Are formula elasticity of demand.

Income Elasticity of Demand and Cross Elasticity of Demand

Demand function for product: Qd = 500 - 2P + 3Pr + 0.1N, where P is price, Pr is price of related good, and N is per capita disposable income. Assume P = $10, Pr = $20, and N = $6,000. A. Income elasticity of demand at N = $6,000? (Show Work) B. Cross elasticity of demand given Pr = $20? (Show Work)

Demand curve, revenue and elasticity

Demand curve product X is given as Q= 2000 - 20P. a. how many units will be sold at price $ 10 B. at what price would 2000 units be sold? o units? 1500?. c. write equations for total revenue and marginal revenue (interm of Q). d. what will be the total revenue at price of $ 70? what will be marginal revenue? e. what is

Analyzing impact of price changes on sales

The ABC company manufacture AM/FM clock radios and sell an average 3000 units monthly at $25 each for retail store. it closest competitor produce a similar type of radio that sell for $ 28. a. If the demand for ABC product has an elasticity coefficient of -3, how many it will sell per month if the price is lowered to 22?

Point Price Elasticity: Amusement Park Example

Price Discrimination for The Fun Land Amusement Park: See attachment for information and equations. a) Assuming the company can discriminate in pricing between locals and tourist customers through coupons distributed to locals via local shops, calculate the profit maximizing price, output, and total profit contribution lev

Calculating markup on price and cost

Mary Richards is a pricing manager of Caring Move, Inc., a local visiting nurse firm in the home care market. Richards has been asked to complete an analysis of profit margins for the firm. Unfortunately, her predecessor on this project was abruptly terminated, leaving only sketchy information on existing pricing practices. A

Calculating the price elasticity of supply

Suppose the supply for good x is estimated by the following equation: Q(x) supplied = 4 + 0.8P(x) - 0.2P(x)expcted - 0.4W Where; Q(x) supplied = quantity supplied of x P(x) = current average good of x P(x) expected = expected price of good x W = average wage rate Suppose; P(x) = $5 P(x) expected = $6 W = $4.5

Price Elasticity

Explain the factors that contribute to the elasticity of goods: 1-discuss in detail the influences of price elasticity of demand 2-explain the factors that contribute to the elasticity of goods 3-discuss how these factors influence consumers to purchases goods or services 4-explain how price elasticity of demand relates to m

McGuigan Economics

1. Assume that the demand for bottled water is price inelastic. Are the following statements true or false? Explain. a. When the price of bottled water decreases, the quantity sold increases. b. The percentage change in the price of bottled water is less than the percentage change in quantity demanded. c. Changes in the price

Price elasticity of demand given the demand for meals at local

1. Using data covering May 1998 to October 2000 a student attempted to estimate the demand for meals at a local restaurant. The data included the average price per meal (p), the number of customers (q), and advertising expenditures (a). The following model in levels and logs was estimated: Q = b0 + b1p + b2a + b3s + b4T Th

Price and Cross-Price Elasticity of Demand

Please see attached for question. Please show all work and completely explain answer. Price Elasticity and Cross-Price Elasticity fo Demand for Florida Indian River, Florida Interior, and California Oranges Based on the above chart, determine by how much the demand for Florida Indian River oranges would change as a resu

Marginal Cost: Find the price at which the firm sells the product.

Suppose that a firm maximizes its total profits and has a marginal cost (MC) of production of $8 and the price elasticity of demand for the product it sells is (-)3. Find the price at which the firm sells the product. (Use equation (3012) and to maximize the profits, MR has to equal MC. Please show all work and explain answer

Pricing Policy: Total Operating Revenue

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

Microeconomics

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: Compute the price elasticity of demand for paint and show your calculations. Decide whether the demand for paint is elastic, u

Price elasticity of demand help

The demand function for Good X is defined as Qx = 75 - 2Px - 1.5Py, where Py is the price of Good Y. Calculate the price elasticity of demand using the point formula for Px = 20 and Py = 10. Determine whether demand is elastic, inelastic, or unit elastic with respect to its own price and whether Good Y is a substitute or a compl

Arc price elasticity for the product

BWC sells chrome wheels for automobiles. At a price of $600 per set, they sold about 900 sets per month. The new general manager for this product decided that they needed more revenues and increased price to $800. However BWC is now selling 200 chrome wheel sets per month at the new price. What is the arc price elasticity for th

Elasticity: Demand and Supply

1. Determine the price elasticity of demand at each quantity demanded using the formula: Percentage change in quantity demanded = (Q2-Q1)/Q1 divided by percentage change in price = (P2-P1)/P1 b. Redo exercise 1a using price changes of $10 rather than $5 c. Plot the price and quantity date given in the demand schedule. Indi

Microeconomics

Question 1 Refer to the graphs. In which graph is there no consumer surplus either with or without a per unit tax? A. B. C. D. Question 2 If the supply curve is perfectly elastic the burden of a tax on suppliers is borne: entirely by the suppliers. enti

Transportation elasticities

Economists have estimated the following transportation elasticities. For each pair, explain possible reasons why the elasticities differ. a. elasticity of demand for buses is 0.23 during peak hours and 0.42 during off-peak hours b. elasticity of demand for buses is 0.7 in the short run and 1.5 in the long run c. elasticity or de

Microeconomics

Question 1 Compute the approximate elasticity of demand from the following data: Answer .87 1.15 1.5 5.0. Question 2 Refer to the graph. Between points A and B, demand is: Answer inelastic. elastic. unit elastic. perfectly elastic.

point price elasticity of demand

Markup on Cost. Brake-Checkup, Inc., offers automobile brake analysis and repair at a number of outlets in the Philadelphia area. The company recently initiated a policy of matching the lowest advertised competitor price. As a result, Brake-Checkup has been forced to reduce the average price for brake jobs by 3%, but it has e

Elasticity of demand for gasoline and public transport

1. A. Current gas is $1.50 a gallon, avg household income is $100,000 a yr. The quantity demanded is 200 million gallons of gas a week. If gas were to increase to $1.68 a gallon the quantity demanded would fall to 158.7 million gallons a week. If household income increased to $110,500 a yr , the quantity demanded would rise to 2

Own Price elasticity.

Own Price elasticity. Given the data to the right, compute the POINT elasticity of demand of a good as its price goes from $1.00 to $1.50. Show formula and work. Price Quantity 1.00 10 1.50 9 Is the demand for this good in this range elastic or inelastic? If the wage bill per unit of labor (L)

Regression and Price Elasticity

The Pilot Pen Company has decided to use 15 test markets to examine the sensitivity of demand for its new product to various prices, as shown in the following table. Advertising effort was identical in each market. Each market had approximately the same level of business activity and population. a. Using a linear regression

Analyzing cross price elasticity of demand

Two goods have a cross price elasticity of +1.2. a. Would you describe these goods as substitutes or complements? b. If the price of one of the goods increases by 5 percent, what will happen to the demand for the other product, holding constant the effects of all other factors?

Regression Anaylsis

1. Suppose QD= 60 - 50PC QS= -66 + 90PC (a) Calculate the equilibrium price and quantity. 2. Interpret the results: of the following Mutiple R 0.980 R square 0.961 Adjusted R square 0.952 Standard error 5.255 Observations 12.000 (i) determine significance of

Determining Price Elasticity of Demand for Coca-Cola

Coca-Cola in dispensers located on a golf course sells for $1.25 a can, and golfers buy 1,000 cans. Assume the course raises the price to $1.26 (assume a penny raise is possible) and sales fall to 992 cans. a. Using the midpoint formula, what is the price elasticity of demand for Coke at these prices? b. Assume the demand fo

Elasticity

Suppose the price of apples rises from $3.50 a pound to $4.00 and your consumption of apples drops from 30 pounds of apples a month to 20 pounds of apples. Calculate your price elasticity of demand of apples. What can you say about your price elasticity of demand of apples? Is it Elastic, Inelastic, or Unitary Elastic? Be sure t

Managerial Economics

MANAGERIAL ECONOMICS 1. Construct a Supply/Demand (S/D) graph, identify the initial equilibrium, then identify the new equilibrium when Supply decreases and Demand increases. 2. In the graph for question number 1, what would happen to the initial equilibrium when consumer incomes increase, assuming the good in question

Economics

1 page Details: Suppose the price of apples rises from $3.50 a pound to $4.00 and your consumption of apples drops from 30 pounds of apples a month to 20 pounds of apples. Calculate your price elasticity of demand of apples. What can you say about your price elasticity of demand of apples? Is it Elastic, Inelastic, or Unitary