When British regulators were forced to suspend the license of a flu vaccine plant in Liverpool operated by the Chiron Corporation due to concerns over bacterial contamination, the number of flu vaccines available in the United States market decreased by 48 million doses. This was nearly half of the total supply of vaccines in the market. a. Shift the appropriate curve or curves to show this dramatic change in the market for flu vaccines. Price Market for flu vaccines Quantity S D b. As a result of the decline in available flu vaccines, the equilibrium price should equilibrium quantity should and the

When British regulators were forced to suspend the license of a flu vaccine plant in Liverpool operated by the Chiron Corporation due to concerns over bacterial contamination, the number of flu vaccines available in the United States market decreased by 48 million doses. This was nearly half of the total supply of vaccines in the market. a. Shift the appropriate curve or curves to show this dramatic change in the market for flu vaccines. Price Market for flu vaccines Quantity S D b. As a result of the decline in available flu vaccines, the equilibrium price should equilibrium quantity should and the

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter6: Simple Pricing

Section: Chapter Questions

Problem 7MC

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The market supply and demand curve for Tesla Model S electric cars is given in the figure below. The equilibrium price and quantity for this market are given by P and Q* respectively. Price P* arts 929ds to bem bon Q* S Quantity 1. Subsequently, Porsche announces an all-electric sports car meant to rival the Tesla Model S. How would this affect the demand for Tesla Model S cars? Illustrate on the graph above. 926e1oni bratani yan 2. How will this change affect the equilibrium price and quantity (i.e. increase, decrease, or stay the same)? Illustrate the new equilibrium price and quantity on the graph above. Describe the market forces that move the price and quantity back into equilibrium after the change in demand f (27nlog A) Sounsven sd bloow terlw
Genovia has experienced exceptional growth in recent years. Its GDP per capita (orIncome) has increased from around $30,000 to $50,000 in last 5 years. Over theperiod quantity demanded of personal cars has increased from 450,000 units per yearto 600,000 units. Quantity demanded of public transport, however, has declined from10,000 buses to 7,000 buses. Calculate income elasticity of demand and tell whichproduct is a normal good and which one is inferior.
When a walk-in clinic spent $5,000 a year on newspaper advertising, it saw 5,000 patients a year. When it increased its annual advertising expenditure to $7,500 per year, it saw 10,000 patients a yeara. What is the change in advertising expenditures?b.What is the change in patient visits?c. What is the advertising elasticity of demand?d. Do you think the increase in advertising expenditures was worthwhile and why?
Do you think the price elasticity of demand for Tesla cars will increase, decrease, or remain the same when each of the following events occurs? Explain your answer. a. Other car manufacturers, such as General Motors, decide to make and sell more hybrids. I b. Hybrids produced in foreign countries are banned from the American market. c. Due to ads, Americans believe that hybrids are much safer than ordinary passenger cars. d. The time period over which you measure the elasticity lengthens. During that longer time, new models such as four-wheel-drive hybrid appear.
7. As the pandemic has waned the demand for airline ticketshas increased. If the price elasticity of demand for air travel was 3.22 before the pandemic the following is most likely now true: Demand has shifted to the right, become more steeply sloped and the airlines can charge higher prices, for a while, as long at the price elasticity of demand is now less than 1.00. Quantity demanded has shifted to the right, the demand curve has become flatter, and the airlines should lower prices into the inelastic range of the demand curve. Airlines that previously would have been wise to leave prices unchanged are now smart to lower prices since demand has shifted to the left and become more flatlysloped. Airlines should have lowered prices before the pandemic and should raise them dramatically at this point, with no regard to the price elasticity of demand. A and D only.
Your Best Brand Bike Shorts-BBB Shorts have been flying off the shelf. Your chiefeconomist tells you that during the Covid-19 pandemic, the taste for bicycling has shifted. Thedemand curve is much more inelastic. The price elasticity of demand has decreased from:-5.76 to -2.70.”Before the campaign your price was $240 per pair of BBB Shorts. What should bethe new price? Please show calculations.
Each scenario gives some information about price elasticity of demand. For each, calculate the missing data, and determine if the price change under consideration will increase, decrease, or not change the firm's total revenue. Honest Abe's Used Cars estimates the price elasticity of demand for their cars to be -4.1. Last month, Abe tried a new marketing scheme which decreased the number of cars sold by 87%. Abe must have his prices by -27.87 Abe's total revenue by increased and total revenue to increased. At Webs-R-Us, a website design company, the new manager has decided to increase the price of Webs-R-Us services by 15%. She estimates that Webs-R-Us has a price elasticity of demand at -0.30. The manager expects the number of websites designed to decrease increase. %. e %
Suppose a movie theater determines it can charge different prices to patrons who go to weekday matinees and people who attend evening and weekend shows. The movie theater's goal is to increase total revenue. See Hint The price elasticity of demand for weekend and evening patrons is -0.50, and the price elasticity of demand for matinee moviegoers is -2.80. Based on the price elasticity of demand for each group of people, how should the movie theater adjust its prices? Choose one: O A. Raise the price for matinee moviegoers, and keep the price the same for weekend and evening patrons. O B. Lower the price for matinee moviegoers, and raise the price for weekend and evening patrons. O C. Lower the price for matinee moviegoers, and keep the price the same for weekend and evening patrons. O D. Raise the price for matinee moviegoers, and lower the price for weekend and evening patrons.
when Honda introduce the Acura to compete with European luxury cars, there was a danger that the new line would take sales away from Honda's Accord. To make Acura more competitive with other luxury cars, suppose Honda cuts the price of Acura while keeping the price of Accord unchanged. If Honda's fear cone true, will it find a negative cross-elasticity demand, negative income elasticity of demand, or positive cross-elasticity of demand?
. UT Sports, a store that sells various types of sports clothing and other sports items, is planning to introduce a new design of World Cup Kits. A consultant has estimated the demand curve to be Q= 8400 – 420 P Where Q is cap sales and P is price. How many KITs could UT sell at $25.2 each? How much would the price have to be to sell 7,560 KITs? Suppose UT were to use the KITs as a promotion. How many KITs could UT give away free? At what price would no KITs be sold? Calculate the point price elasticity of demand at a price of $ 25.2.
Joe's Pig Palace sells barbecue plates for $4.50 each, and serves an average of 525 customers per week. During a recent promotion, Joe cut his price to $3.50 and observed an increase in sales to 600 plates per week. a. Calculate Joe's arc price elasticity of demand. b. Joe is considering permanently lowering his price to $4.00 to increase revenue. How many plates should Joe expect to sell at the new price? Does the move make sense in the light of Joe's desire to increase revenue?
Rachel earns twice as much money as her sister Maya. Both sisters equally love taking trips to Disneyland. Suppose the ticket price of Disneyland rises from $140 to $180. Rachel decreases the number of times she goes to Disneyland by 20%. Maya's price elasticity of demand (in absolute value) for Disneyland trips will for sure be Selected answer will be automatically saved. For keyboard navigation, press up/down arrow keys to select an answer. b C d smaller than 1.25 larger than 1.25 smaller than 0.8 larger than 0.8