In an effort to reduce excess end-of-the-model-year inventory, Harrison Ford offered a 1 percent discount off the average price of 4WD Escape Gas-Electric Hybrid SUVs sold during the month of August. Customer response was wildly enthusiastic, with unit sales rising by 10 percent over the previous month's level. A.Calculate th
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You are a 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?
Market Researchers at the Lawrence Company estimate that the demand function for a product is Q = 75 P-2 I-2 Q is quantity demanded, P is Price, and I is Income. Marginal cost is estimated to be $15. a. They have their product priced at $30. Is this optimal? Why or why not. b. What would you recommend their optima
Explain what causes changes in supply and demand in 350 words with APA format in-text citations. Please see reading material attached. (APA for material attached) Mankiw, N. (2007). Principles of Economics (4th ed.). Mason, OH: Thomson South-Western
1. Consolidated Drugs, Inc. has spent $4 million developing and testing a new anti-aging drug. Management now estimates that it will cost $2 million to produce and market this new product. The present value of total revenue from all future sales of this drug is estimated to be $5 million. On the basis of these numbers, manage
Prepare a two- to three-page analysis by answering the questions below. Demand Schedule for Barbeque Dinners Price Quantity Demanded Total Revenue Elasticity Coefficient Elastic or Inelastic $4 100 __________ XXXX XXXX 6 80 __________ __________ __________ 8 60 __________ __________ __________ 10 40 __________ _____
Please show work where necessary for a complete understanding Stage III of the short-run Production Function is A) the most efficient mix of inputs. B) the least costly level of output. C) where additional units of inputs will lead to less output. D) where additional units of inputs will lead to more output In th
What are the major determinants of price elasticity of demand? Use these determinants and your own reasoning in judging whether demand for each of the following products is elastic or inelastic, and explain your rationale for each one: a) bottled water; b) toothpaste; c) Crest toothpaste; d) ketchup; e) diamond bracelets; f) M
Please see attached. a) Suppose the current price is $8 per cup. Using elasticity of demand, explain why Starbucks should not increase the price in order to increase total revenue. (b) Suppose the current price is $2 per cup. Using elasticity of demand, explain why Starbucks should not lower the price in order to
1). Use the attached diagram to answer the next question. Between the prices of $10 and $8, the price elasticity of demand is: A) 0.5 B) 0.9 C) 1.11 D) 2.0 2). Suppose that a business incurred implicit costs of $300,000 and explicit costs of $1,300,000 over the past year. If the firm earned $1,400,000 in re
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 demand for toll roads is 4.7 for low-income commuters and 0.63 for high-income commuters. and A study found that in California, where car vanity license plates cost $28.75, the elasticity of demand was 0.52. In Massachusetts, where vanity plates cost $50, the elasticity of demand was 3.52. a. Assuming vanity plates have zero production cost, was each state collecting the maximum revenue it could from vanity plates? Explain your reasoning. b. What recommendation would you have for each state to maximize revenue? c. Which state was most likely to be following a political unsupportable policy?
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
Suppose the price of apples rises from $3.50 a pound to $4.00 and your consumption of apples drops from 30 pounds of apples a month to 20 pounds of apples. Calculate your price elasticity of demand of apples. What can you say about your price elasticity of demand of apples? Is it Elastic, Inelastic, or Unitary Elastic? Be sure t
Description of how a firm competes in the marketplace. Does the firm engage in price or non-price competition? Why do you believe the firm selected this mode of competition? Is it the best approach? Consider both market structure and price elasticity of demand when you formulate your answer.
Please re-word the following into your own words and include some examples. Its a respond to the question, Explain why the price elasticity of demand varies along a demand curve, even if the demand curve is linear. As we move down a demand curve, the percentage change in price (quantity) varies. When price is relatively high,
Discusses: QuadPlex Cinema is the only movie theater in Idaho Falls. The nearest rival movie theater, the Cedar Bluff Twin, is 35 miles away in Pocatello. Thus QuadPlex Cinema possesses a degree of market power. Despite having market power, QuadPlex Cinema is currently suffering losses. In a conversation with the owners of QuadPlex, the manager of the movie theater made the following suggestions: "Since QuadPlex is a local monopoly, we should just increase ticket prices until we make enough profit." Comment on this strategy. How might the market power of QuadPlex Cinema be measured? Also recommend, the options that QuadPlex consider in the long run. Fully explain your answer in terms of market power
QuadPlex Cinema is the only movie theater in Idaho Falls. The nearest rival movie theater, the Cedar Bluff Twin, is 35 miles away in Pocatello. Thus QuadPlex Cinema possesses a degree of market power. Despite having market power, QuadPlex Cinema is currently suffering losses. In a conversation with the owners of QuadPlex, the ma
Given the following demand function: PriceP$ 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
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
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
#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
Does current economic crisis (growing unemployment)have impact on price elasticity of health care demand?
Use these determinants in judging whether demand for each of the following products is elastic or inelastic. a. Apples b. Cigarettes c. Winston cigarettes d. Butter e. Gasoline
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
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
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%
Suppose the price of apples rises from $3 a pound to $3.50 and your consumption of apples drops from 35 pounds of apples a month to 20 pounds of apples. What would your price elasticity of demand of apples be. What can you say about your price elasticity of demand of apples? Is it Elastic, Inelastic, or Unitary Elastic?
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
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.
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
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
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