ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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11. Describe what will be the impact of a decrease in the
on the
12. As consumer Incomes rise, to which direction the demand curve shifts for
restaurant dinners?
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- 8. Substitutes, complements, or unrelated? You work for a marketing firm that has just landed a contract with Run-of-the-Mills to help them promote three of their products: penguin pops, flopsicles, and kipples. All of these products have been on the market for some time, but, to entice better sales, Run-of-the-Mills wants to try a new advertisement that will market two of the products that consumers will likely consume together. As a former economics student, you know that complements are typically consumed together while substitutes can take the place of other goods. Run-of-the-Mills provides your marketing firm with the following data: When the price of penguin pops decreases by 10%, the quantity of flopsicles sold decreases by 9% and the quantity of kipples sold increases by 9%. Your job is to use the cross-price elasticity between penguin pops and the other goods to determine which goods your marketing firm should advertise together. Complete the first column of the following…arrow_forward(i) InfoConsider the three demand functions in the file Elasticity. Calculate the elasticities of these three demand functions when the price of the product increases from P = $200 per unit to P = $400 per unit. Enter the elasticities as positive numbers. Elasticity of the red demand function = Elasticity of the green demand function = Elasticity of the blue demand function =..arrow_forwardSuppose the own price elasticity of demand for good X is -3, its income elasticity is 1, its advertising elasticity is 2, and the cross-price elasticity of demand between it and good Yis -4. Determine how much the consumption of this good will change if: Instructions: Enter your responses as percentages. If you are entering a negative number, be sure to use a (-) sign. a. The price of good X decreases by 5 percent. percent b. The price of good Yincreases by 10 percent. percent c. Advertising decreases by 3 percent. percent d. Income increases by 4 percent. 4 percentarrow_forward
- 3. Joe Snow’s income declines as he rejoins the Black Watch, and as a result, he buys more wine. Is wine an inferior or a normal good for Jon? What happens to Jon’s demand curve for wine?arrow_forward4) Provide a simple definition of the price elasticity of demand and explain why knowing the price elasticity for her product is useful to the firm's manager.arrow_forwardWhat is the current price of gasoline and how many gallons of gasoline do you currently buy per month? How many gallons would you buy next month and how would your behavior change if the price fell by $1.25 per gallon? Also, based on that information, what is your price elasticity of demand for gasoline? Be sure to show how you calculated your price elasticity of demand. current price of gas = $2.53 gallons of gas per month = 72 gallons no change for next month On the average I fill my tank up 3 times a month each time I go I spend $60-$65arrow_forward
- 8. Substitutes, complements, or unrelated? You work for a marketing firm that has just landed a contract with Run-of-the-Mills to help them promote three of their products: penguin patties, raskels, and kipples. All of these products have been on the market for some time, but, to entice better sales, Run-of-the-Mills wants to try a new advertisement that will market two of the products that consumers will likely consume together. As a former economics student, you know that complements are typically consumed together while substitutes can take the place of other goods. Run-of-the-Mills provides your marketing firm with the following data: When the price of penguin patties decreases by 1%, the quantity of raskels sold decreases by 18% and the quantity of kipples sold increases by 3%. Your job is to use the cross-price elasticity between penguin patties and the other goods to determine which goods your marketing firm should advertise together. Complete the first column of the following…arrow_forwardAnswer correctly. I will rate accordingly.arrow_forward
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