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Elasticity

How does a firm (FIDO cell phones) competes

Description of how a firm competes in the marketplace. Does the firm engage in price or non-price competition? Why do you believe the firm selected this mode of competition? Is it the best approach? Consider both market structure and price elasticity of demand when you formulate your answer.

Elasticity and Linear Demand

Please re-word the following into your own words and include some examples. Its a respond to the question, Explain why the price elasticity of demand varies along a demand curve, even if the demand curve is linear. As we move down a demand curve, the percentage change in price (quantity) varies. When price is relatively high,

Analyzing demand function

Given the following demand function: PriceP$ Quantity,QD(Pounds of steak) Arc Elasticity, ED Total Revenue Marginal Revenue 12 30 n.a n.a 11 40 10 50 9 60 8

Discussion of Elasticity

Scenario: Suppose that the current market price of VCR's is $300, that the average consumer disposable income is $30,000, and that the price of DVDs (a substitute for VCR's) is $500. Under these conditions annual U.S. demand for VCR's is 5 million per year. Statistical studies have shown that for VCR's the own-price elasticity o

Concept of Elasticity (Demand and Supply)

Use an elasticity concept to explain each of the following observations. a. During economic boom times, the number of new personal care businesses, such as gyms aand tanning salons, is proportionately greater than the number of other new business such as grocery stores. b.Cement is the primary building material in Mexi

Price elasticity of demad, determinants of elasticity

#1: (Categories of Price Elasticity of Demand) for each of the following absolute values of price elasticity of demand, indicate whether demand is elastic, inelastic, perfectly elastic, perfectly inelastic, or unit elastic. In addition, determine what would happen to total revenue if a firm raised its price in each elasticity ra

Elasticity of Demand and Supply, Production and Cost in the Firm

Answers the questions Question 1 When a government wants to increase tax revenue, they will often increase the sales tax on gasoline. Using price elasticity of demand, explain why the tax would be placed on gasoline rather than, say, yachts. What might be the long run effect of raising the price of gas? Question 2 Th

Calculate: Price Elasticity of Demand

Question: In 1991, Brazil and Columbia united to form a coffee cartel and reduce coffee output. Suppose total costs for the cartel are: TC = 12 + 5Q + Q2 Here Q is millions of pounds of coffee. The market demand curve for coffee is: P = 17 - Q Here P is millions of dollars per million pounds. Suppose before the cartel

Elasticity Problems

Please refer attached file for graphs. Problems : 1.It has been estimated that the price elasticity of demand for attending baseball games is .23. If price were the only factor to change, a rise in attendance of 10%, one could conclude that price of baseball tickets: a.fell by 43.48% b.rose by 43.48% c.fell by 2.3%

Price Elasticity

Suppose the price of movies seen at a theater rises from $12 per couple to $20 per couple. The theater manager observes that the rise in price causes attendance at a given movie to fall from 300 persons to 200 persons. What is the price elasticity of demand for movies? A) 0.5 B) 0.8 C) 1.0 D) 1.2

Economics - Price Elasticity Problem

The price elasticity of demand for bath tissue has been estimated to be -2.42. This implies that a 10 percent decrease in the price of bath tissue would cause the quantity demanded of bath tissue to: A) increase by 2.4 percent. B) decrease by 2.4 percent. C) increase by 24.2 percent. D) decrease by 24.2 percent.

Price elasticity of demand

The price elasticity of demand is calculated as: A) the change in price divided by the change in quantity demanded. B) the change in quantity demanded divided by the change in price. C) the percentage change in price divided by the percentage change in quantity demanded. D) the percentage change in quantity

the implied arc income elasticity of demand

Unique is a leading manufacturer of powerful fully-loaded super light-weight laptop personal computers. Demand for Unique computers is tied to the overall pace of business sales and, therefore, is sensitive to changes in national income. The personal business computer industry is highly competitive, so Unique's demand is also ve

New shopping Discussion of Consumers

From our discussion of consumer behavior and elasticity, "Do you believe Americans will no longer shop as they had before?" For example, in the "old days", Jimmy Choo shoes would cost $500 (approximately - ladies - help me out here) but now can obtain for 70% less. Do you think we, as consumers will be more price sensitiv

Profit maximization, elasticity & marginal cost: Example problem

The Alvin Corporation is the only producer of a particular type of laser. The demand curve for its product is: Qd = 8,300 -2.1P And its total cost function is: TC = 2,200 + 480Q +20Q² Where P is price (in dollars), TC is total cost (in dollars), and Q is monthly output a. To ma

Elasticity concepts

Questions 1. Price elasticity of demand is the percentage change in price divided by the percentage change in quantity demanded. Ans: 2. If the price of a good goes up by 20 percent and the quantity demanded falls by 40 percent, the price elasticity of demand is 2. Ans: 3. If the price of corn goes up b

Microeconomics help

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 Elastic?

Elasciticy of demand

This year was prosperous for the Starbucks Coffee Company. revenues increased 9 percent, excluding the 1035 new retail outlets that were opened. suppose management attributes this revenue growth to a 5 percent increase in the quantity of coffee purchased. if Starbucks's marketing department estimates the income elasticity of

Elasticity of demand

Using the "arc formula" and the data from the table below, compute where possible the own- price and income elasticities of demand. (remember that these elasticities are computed holding all other variables constant). Price quantity price of related goods income $10 600 $20

Economics

Problems: 1)For each of the following cases, calculate the arc price elasticity of demand and state whether demand is elastic, inelastic or unit elastic a) when the price of milk increases from $2.25 to $2.50 per gallon, the quantity demanded falls from 100 gallons to 90 gallons b) when price of paper book falls fro

Predicting Changes in Demand

Question: Suppose that the price elasticity of demand for good X is -2, its income elasticity is 3, its advertising elasticity is 4, and the cross price elasticity of demand between it and good Y is -6. Determine how much consumption changes if: a) The price of good Y increases by 10% b) Advertising decreases by 2% c) Incom

Accounting Firm Operating in a Competitive Market

See the attached file. 1. Is an accounting firm operating in a perfectly competitive market? Why or why not? 2. If the owner of the company ( accounting firm) asked you to assess whether or not they were using the optimal amount of an input (given a set price for that input), what economic criterion would you use in your ana

If CD's and MP3's are substitute goods and the price of MP3's rises

I need some help on some review questions, can you please help me? Review Questions 1. If CD's and MP3's are substitute goods and the price of MP3's rises (be careful because we don't know why the price of MP3's rises): A) the demand for CD's will fall and their price fall B) the demand curve for CD's wil

Price Elasticity

Define Price Elasticity and give information and example on the subject

Micro Economics

1. A major cereal manufacturer decides to lower prices from $3.60 to $3.00 per 15-ounce box. If quantity demanded increases by 18%, what is the price elasticity of demand? Is this an example of elastic or inelastic demand? 2. To increase state tax revenues, the Governor of California has proposed an additional sales tax on

Marginal Revenue: Price Elasticity

From this, please help to figure out the Marginal Revenues and associate it with price elasticity. Just a simple analysis will be fine. Server Performance Monitoring Price per server monitoring per month Windows $18 UNIX $20 SAP $22 Database $22 2008 rates Server Performance Monitoring Price per server monit