Purchase Solution

Economics pricing

Not what you're looking for?

Ask Custom Question

Please help with the following problem.

Explain what would happen to equilibrium price and quantity in the market for Pepsi if the following occurred (be sure to indicate WHY it happens as well):

a. The price of Coke decreases.

b. Average household income falls from $50,000 to $43,000

c. There are improvements in soft-drink bottling technology.

d. The price of sugar increases and the Pepsi launches an extremely successful advertising campaign.

Purchase this Solution
Solution Summary

This solution answers questions about economic pricing. It helps explain what would happen to equilibrium price and quantity in the market for Pepsi if the price of Coke decreases, average household income falls from $50,000 to $43.000, there are improvements in soft-drink bottling technology, and the price of sugar increases.

Solution Preview

a. The price of Coke decreases.

When the price of Coke (a substitute) decreases, more people would now buy coke instead of Pepsi. For Pepsi, its demand curve would shift down. That leads to a lower price and a lower quantity demanded.

b. Average household income falls from $50,000 to $43,000

When income drops, people have less money to spend, and their demand (for every) ...

Purchase this Solution
Free BrainMass Quizzes
Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

View More Free Quizzes
Related BrainMass Solutions

  • ELASTICITY OF DEMAND

    At the end, I wish you a happy learning.// References Economics for Managers (2004). Hyderabad: ICFAI Center for Management Research. Mathur, N.D. (2003). Business Economics (2nd Ed.). Jaipur: Shivam Book House Private Limited.

  • Microeconomic Analysis - Economics, Supply and Demand

    Pricing policy: Pricing policy includes profit maximizing pricing policy, cost conscious pricing policy, import parity pricing policy, discrimination pricing policy, etc.

  • Price Discrimination -

    The difference in price discrimination between economics and marketing is different because economics focuses on price discrimination as a tool to appropriate consumer surplus.

  • Principles of market economics

    Explain what is meant by predatory pricing, and the inherent difficulties involved with predatory pricing from a firm's point of view. Predatory pricing is designed to drive competitors out of business.

  • economics

    Regards Jayant Kumar This solution is comprised of solution for questions related with economics.

  • Pricing ATM Machines

    226101 Simple Pricing Pricing ATM Machines (Simple Pricing) A bank in a medium-sized Midwestern city, Firm X, currently charges $1 per transaction at its ATMs.

  • Overview of University of Phoenix

    I need assistance with writing a Company/Industry Overview of the University of Phoenix from an economics perspective.

  • Managerial Economics: Groupon

    The expert examines managerial economics. The answer includes references used.

  • AT&T pricing strategy, RV pricing strategy

    Use pricing strategy and managerial economics to support your answer. 1. AT&T adopted the strategy as a means of cross subsidization.

  • Pricing at Snow City Ski Resort

    119257 Economics/Pricing at Snow City Ski Resort Q2: The Snow City Ski Resort cater to both out of town and local skiers. The demand for each market segment as well as the combined market is given in the attached table.

View More Related Solutions