Instruction: All answers should be numeric (numbers only, without letters, commas, spaces and currency symbols). Answers in items 1 and 2 are whole numbers. Round-off answers (to items 3 and 4) to 2 decimal places. Billy Jeans, Inc. is a manufacturer of quality denims for men. Their demand and supply equations for their low-rise jeans are given below: Qd = 35000 – 14P Qs %3D 5000 + P 1. Solve for P* 2. Solve for Q* 3. Last month, a competitor offered a 20 percent discount off their regular Php1800 price on their low-rise jeans which caused Billy Jeans' sales to decrease by 3000 units (from the Q*, computed in item 2). Calculate the arc cross-price elasticity of demand for Billy Jeans' low-rise denims for men. 4. In order to regain lost sales, Billy Jeans lowered their original price (from P*, computed in item 1) by 10 percent, increasing their sales from 4000 to 6000 units. Calculate the arc price elasticity of demand for Billy Jeans' low-rise denims for men.

Instruction: All answers should be numeric (numbers only, without letters, commas, spaces and currency symbols). Answers in items 1 and 2 are whole numbers. Round-off answers (to items 3 and 4) to 2 decimal places. Billy Jeans, Inc. is a manufacturer of quality denims for men. Their demand and supply equations for their low-rise jeans are given below: Qd = 35000 – 14P Qs %3D 5000 + P 1. Solve for P* 2. Solve for Q* 3. Last month, a competitor offered a 20 percent discount off their regular Php1800 price on their low-rise jeans which caused Billy Jeans' sales to decrease by 3000 units (from the Q, computed in item 2). Calculate the arc cross-price elasticity of demand for Billy Jeans' low-rise denims for men. 4. In order to regain lost sales, Billy Jeans lowered their original price (from P, computed in item 1) by 10 percent, increasing their sales from 4000 to 6000 units. Calculate the arc price elasticity of demand for Billy Jeans' low-rise denims for men.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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