Consider the market for fast food in Mexico in the medium run with the following changes occurring. First, multinational fast food corporations have been opening and expanding in the country. Second, public health groups have been pursuing public health campaigns against consuming foods that are high in sodium and saturated fat and highly processed foods. Explain in words and graphically the effect that such simultaneous changes may have had on equilibrium price and quantity in the Mexican fast food market. Be sure to explain the specific mechanisms at work. I Consider the market for fast food in Mexico in the medium run with the following changes occurring. First, multinational fast food corporations have been opening and expanding in the country. Second, public health groups have been pursuing public health campaigns against consuming foods that are high in sodium and saturated fat and highly processed foods. Explain in words and graphically the effect that such simultaneous changes may have had on equilibrium price and quantity in the Mexican fast food market. Be sure to explain the specific mechanisms at work. I

(Calculating Price Elasticity of Demand) Suppose that 50 units of a good are demanded at a price of Si per unit. A reduction in price to $0.20 results in an increase in quantity demanded to 70 units. Using the midpoint formula, show that these data yield a price elasticity of 0.25. By what percentage would a 10 percent rise in the price reduce the quantity demanded, assuming price elasticity remains constant along the demand curve?

What is the difference between the supply and the quantity supplied of a product, say milk? Explain in words and show the difference on a graph with the supply curve for milk.

The Stopdecay Company sells an electric toothbrush for $25. Its sales have averaged 8,000 units per month over the past year. Recently, its closest competitor, Decayfigh ter, reduced the price of its electric toothbrush from $35 to $30. As a result, Stopde cays sales declined by 1,500 units per month. What is the arc cross elasticity of demand between Stopdecays toothbrush and Decayfighters toothbrush? What does this indicate about the relationship between the two products? If Stopdecay knows that the arc price elasticity of demand for its toothbrush is 1.5, what price would Stopdecay have to charge to sell the same number of units as it did before the Decayfighter price cut? Assume that Decayfighter holds the price of its toothbrush constant at $30. What is Stopdecays average monthly total revenue from the sale of electric toothbrushes before and after the price change determined in part (b)? Is the result in part (c) necessarily desirable? What other factors would have to be taken into consideration?

Suppose Sally buys exactly five bars of English toffee each week, regardless of whether the toffee bars are regularly priced at 1 or on sale for 0.50. Based on this information, what is Sallys price elasticity of demand for English toffee in this price range? a. 0 b. 1 c. Infinity d. Cannot be determined.

What is the price elasticity of supply? Can you explain it in your own words?