By how much does the residual elasticity of demand facing a firm increase as the number of firms increases by one firm? The effect of a change in the number of firms on the residual elasticity of demand for a firm as a function of the number of firms (n), the market elasticity of demand (e), and the supply elasticity of the other firms (no) is (Properly format your expression using the tools in the palette. Hover over tools to see keyboard shortcuts. E.g., a subscript can be created with the character)
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- By how much does the residual elasticity of demand facing a firm increase as the number of firms increases by one firm? The effect of a change in the number of firms on the residual elasticity of demand for a firm as a function of the number of firms (n), the market elasticity of demand (ɛ), and the supply elasticity of the other firms (no) is de; ||: (Properly format your expression using the tools in the palette. Hover over tools to see keyboard shortcuts. dn E.g., a subscript can be created with the _ character.)q = 70 - 1,5p Calculate the arc price elasticity of demand for a production in price from p= 30 to p = 20 The following demand function is given: q = 70 – 1,5p Calculate the point elasticity of demand at p 30 and at p = 20 A firm faces a demand function (where q=quantity demanded and p=price): q = 200 – 2p 122. 123. function (where g=output):Femi's HookNLadder is the only company selling fire engines in the fictional country of Alexandrina. Femi Initially produced five trucks, but then decided to increase production to six trucks. The following graph gives the demand curve faced by Femi's HookNLadder. As the graph shows, in order to sell the additional fire truck; Femi must lower the price from $160,000 to $120,000 per truck. Notice that Femi gains revenue from the sale of the additional engine, but at the same time, he loses revenue from the initial five engines because they are all sold at the lower price. Use the purple rectangle (diamond symbols) to shade the area representing the revenue lost from the initial five engines by selling at $120,000 rather than $160,000. Then use the green rectangle (triangle symbols) to shade the area representing the revenue gained from selling an additional engine at $120,000. PRICE (Thousands of dollars per fire engine) 8 8 2 2 2 2 8 2 2 2 20 220 200 180 160 140 120 100 60 40 0 2 3…
- QUESTION 1 Firms A, B, and C were all selling 1,000 cups of coffee per day at $3.50 per cup, but in the following week they all changed their prices. This gave their managers some information about the elasticity of demand in their local market, though they have to be careful to recognize that other factors might also have affected demand. The table below shows the change in sales as a result of their new prices; they made no other changes. Complete the table by calculating the revenue, cost of goods sold (COGS), and gross margin for each firm. Firm Baseline A B C Price per Cup $3.50 $3.00 $4.00 $2.50 Cups Sold 1,000 1,140 830 1,500 Revenue $3,500 $0 0 0 COGS @ $0.35 per Cup $350 $0 $0 $0 Gross Margin $3,150 $0 $0 $0 Coffee prices are going up, and Firm B is trying to decide whether to pass on to customers a cost increase of 10¢ per cup-to $0.45 per cup. What will be their new gross margin if they don't pass on the cost increase and demand remains unchanged? $ 0 What will be their new…Suppose you are managing a farming company, which is one of the major producers of Tomato in the State of North Carolina. You have been provided with the following graph which shows the demand curve for the tomatoes that your company is producing. As you can see, there are two known points (X and Y) on a demand curve for tomatoes. According to the “standard" method of computing elasticity (i.e. use the standard formula of percentage change in your computations), the standard-method price elasticity of demand for tomatoes when moving from point X to point Y is approximately Demand 10 20 30 40 50 60 70 80 90 100 QUANTITY (Thousands of pounds of tomatoes)You would like to control the total consumption of soft drink up to 100 bottles per year. The current two brands you drink are Pepsi and Coke. The current demand, price, elasticity, and minimum demand for Pepsi and Coke are given in below. In addition, you would like to keep equal or more demand from Pepsi due to brand loyalty. Assuming linear demand curves, what are the best price for Pepsi and Coke that can minimize your total payment? Elasticity Current price Demand Minimum demand Keep Pepsi income > = 60% of total payment Pepsi 2 2 300 20 Coke 1 3.5 220 25
- The manager of a bicycle shop has found that, at a price (in Rands) of p(x) = 150 –x/4 per bicycle, x bicycles will be sold . Answer the following:• Find an expression for the total revenue from the sale of x bicycles. (Hint: Revenue = Demand *Price. )• Find the expression for the quantity to be sold q if the demand function demand is given byp = -10q + 3200• What is the number of bicycles x, sold if the price is R40Suppose that managers at Honda are deciding how to price the new Honda Accord. The managers estimate that their total costs increase by $20,000 for each car they produce. They also estimate the demand curve they face; it is described by the equation: Q = -0.4 P + 16,000, where Q represents the quantity of Honda Accords they will sell and P represents the price they charge in US dollars. We can re-write that demand curve as: P = 40,000 - 2.5 Q. Take every possibly quantity that the managers might choose between 0 and 7,000 in units of 100. For each possible quantity, calculate the associated price the managers would need to charge, the revenue they would earn, and the total costs. You can then calculate profits for each level of quantity. Highlight the cell that contains the highest value of profit.Suppose that managers at Honda are deciding how to price the new Honda Accord. The managers estimate that their total costs increase by $20,000 for each car they produce. They also estimate the demand curve they face; it is described by the equation: Q = -0.4 P + 16,000, where Q represents the quantity of Honda Accords they will sell and P represents the price they charge in US dollars. We can re-write that demand curve as: P = 40,000 - 2.5 Q. Take every possibly quantity that the managers might choose between and 7,000 in units of 100. For each possible quantity, calculate the associated price the managers would need to charge, the revenue they would earn, and the total costs. You can then calculate profits for each level of quantity. Highlight the cell that contains the highest value of profit. Finally, you can also approximate marginal revenue here as the change in total revenue after the next 100 cars are produced. At what quantity does marginal revenue roughly equal marginal cost?…
- You own a bakery and shop that makes and sells gourmet doggie treats. You have done market research and you know with certainty that your product is a normal good, not an inferior good. The current demand function for your gourmet doggie treats is: QD = 480 -6*P which of course means the equation for your current demand curve is: P = 80 -(1/6)*Q You are opening a new shop in a new part of town, and you know that incomes in that part of town are much lower than incomes are where your shop is now. Which of the following is most likely the demand curve in your new shop? Multiple Choice O P=68- (1/6)*Q P = 102 - (1/6)*Q P=92-(1/6)*Q P = 88 - (1/6)*QK Given the input-output matrix below, find the output matrix if final demand changes to 400 for water, 180 for electric power, and 700 for agriculture. Industry: Water Electric Power Agriculture Other Water 120 120 240 720 The output matrix is X = (Round to two decimal places as needed.) Industry Electric Power 400 200 100 300 8 Agriculture Final Demand 180 240 120 60 260 170 500A firm's markup μ per unit of output is given by u = ((p - w/A)/p where p is the price of the output good, w is the nominal wage per hour, and λ is the average productivity of labour (the number of output units per hour). The markup u is determined from the elasticity of the demand curve the firm faces: μ = 1/elasticity. Which of the following statements are correct? A higher elasticity leads to a lower real wage. Ap - w is the nominal profit per hour per worker. The real output per worker (A) is split into the firm's share Au and the worker's share w/p. The real wage is given by w/p = μ - λμ.