Use the figure below to answer the following questions. Price (dollars per DVD rental) 7.00 6.00 5.00 4.00 3.50 Figure 5.2.6 3 5 S = MC 7 9 Rentals (per hour) OA. $28 OB. $1 O C. $7 OD. $3 OE. $6
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- You have just opened a new grocery store. Every item you carry is generic (generic beer, genericbread, generic chicken, etc.). You recently read an article in the Wall Street Journal reporting thatthe price of recreation is expected to increase by 15 percent and cross price elasticity is 0.15. will this affect your store’s salesof generic food products?1. The manager of a fleet of cars currently rents them out at the market price of $49 per day,with renters paying for their own gasoline and oil. In a front-page newspaper article, themanager learns that economists expect gasoline prices to rise dramatically over the nextyear, due to increased tensions in the Middle East. What should she expect to happen to theprice of the cars her company rents?The table below shows the percentage change in quantity demanded of sending regular mail, of sending parcels, and of home broadband service in Australia from a one-percent increase in each specified price (holding all other prices constant): Change in price of: Sending regular mail Effect on quantity of: Sending regular Sending parcels Home broadband mail -1.5 Sending parcels 0 Home broadband +0.05 0 -1 -0.7 +0.01 -0.11 -0.5 a) For which services is quantity demanded price elastic? Or price inelastic? b) Which services are substitutes and which are complements? c) How would an increase in the price of sending regular mail affect total revenue to Australia Post from that service? How would an increase in the price of home broadband affect total revenue to suppliers of broadband?
- Refer to the figure below. If Mallory and Rick are the only two consumers in this market and the price of soda is $0.75 per can, then what will be the market demand for soda each month? Mallory's Demand for Sodal Rick's Demand for Soda Price ($/can) 1.50 1.25 1.00 0.75 0.50 0.25 0 0 10 20 30 40 50 60 70 Quantity (cans of soda/month) rev: 02_01_2018_QC_CS-116371 O 70 50 O 30 O 20 Price ($/can) 1.50 1.25 1.00 0.75 0.50 0.25 0 0 10 20 30 40 50 60 70 Quantity (cans of soda/month)Suppose that the demand and supply schedules for raisins in South Carolina are as fallows, quantitiesare measured in millions of packs per month. What is the quantity of raisins bought if the price is 50cents ? Price (cents per pack) Quantity demanded20 18030 16040 14050 12060 10070 8080 60 a) 120b) 180c) 100With this graph given, What are the implications of this to both the sellers and the consumers?
- The following data reveal how much each consumer is willing to pay for an Alaskan Cruise. Ed- $2000 Hugo-$1800 Isabel-$1500 Carol -$1500 Gigi-$1300 Bob-$1100 Amy-$900 Eduardo-$400 a. Draw the Market Demand Curve For these 8 consumers (Want to check this is correct)If the price elasticity of demand for used carspriced between $3,000 and $5,000 is 2 1.2 (usingthe mid-point method), what will be the percentchange in quantity demanded when the price of aused car falls from $5,000 to $3,000?Refer to the table below to answer the questions. Use the mid-point formula. $4 A 10 B 9. E 7 Demand 1 2 3 4 5 Number of gardenburgers 4.1) If the price of a gardenburger increases from RM8 to RM10, the price elasticity of demand equals and demand is 4.2) If the price of a gardenburger increases from RM6 to RM8, the price elasticity of demand equals 4.3) If the price of a gardenburger decreases from RM7 to RM6, the price elasticity of demand equals 4.4) If the price of a gardenburger decreases from RM9 to RM8, the price elasticity of demand equals and demand is and the decrease results in a(n) in total revenue. and demand is 4.5) If the price of a gardenburger decreases from RM8 to RM7, the price elasticity of demand equals 4.6) If the price of a gardenburger increases from RM7 to RM9, the price elasticity of demand equals and demand is and the increase results in a(n) in total revenue. Price 00
- 17 If the inverse demand function for computers was p = 70 - qAnd the selling price was $35 could you increase price to receive more revenue?Suppose the accompanying table contains data on how many Veggie Delite sandwiches Subway is willing to sell each day at two different prices. Calculate the daily price elasticity of supply when the price increases from $5.00 to $7.50. Please round to the nearest hundredth. Price(per sandwich) Quantity supplied(sandwiches per day) $5.00 200,000 $7.50 210,000 a. Daily price elasticity of supply for Veggie Delite sandwiches = b. The daily price elasticity of supply for Veggie Delite sandwiches is relatively Elastic or Inelastic Now consider how responsive Subway’s supply of Veggie Delite sandwiches is to changes in price on an annual basis instead of a daily basis. c. Compared to the daily value, the annual price elasticity of supply for Veggie Delite sandwiches is likely to be more Inelastic or Elastic and the annual supply curve is likely Flatter or Steeper to be than the daily supply curve.Assume that you own a local brewery and that you sell 12 packs of your beer for $10 each. You hire a consultant to help you improve your business and she shows you that the price elasticity for your beer is 0.85. If your goal is to maximize your income/revenue, what should you do? 2. You run a hotel and you have determined that if you lower the price of your rooms 15% you will be able to rent 20% more rooms each month a.What is your price elasticity of demand for hotel rooms? b. If you want to maximize your revenue from renting out hotel rooms, what, if any changes should you make to the price? 3. Which product likely has a more in elastic demand, a movie ticket or lifesaving medication? Why? 4. If new substitutes are developed for a product, what will likely happen to the demand curve for that product? 5. If new substitutes are developed for a product, what will likely happen to the total revenue maximizing price for that product?
