Suppose you are a business owner. Discuss how you would use various demand elasticities (own-price, cross-price & income) in your decision making process.
Q: When the price of shirts emblazoned with a college logo is $20, consumers buy 150 shirts per week.…
A: According to the question, When the price of a college logo t-shirt is $20, people will buy 150…
Q: RUE OR FALSE (give the reason if the answer is false) 1. Increasing in the skirt price by 20% led to…
A: Price elasticity refers to the responsiveness of the quantity demand due to change in price. If the…
Q: The price of a bus ride decreases, and the total revenue of the bus company fall. The supply for bus…
A: The responsiveness of a good or service's supply to a change in its market price is measured by its…
Q: The price of a new Ford car increases from £12,000 to £15,000 and in response the sales of Nissan…
A: The markets are the place where the interaction between the buyers, and sellers of goods, and…
Q: The price elasticity of demand for a popular sporting event is 1.2. If the price of a ticket to this…
A: Elasticity is an economic metric that measures how sensitive one economic component is to another,…
Q: f the quantity demanded from good Z increases from 13 to 19 units due to the decrease in its price…
A: Price elasticity of demand measures the percentage change in quantity due to percentage change in…
Q: Elasticity of demand depends on a number of factors, including whether the product in question is a…
A: The price elasticity of demand measures the percentage change in the quantity demanded of the good…
Q: A marketing executive once said, “If the price elasticity of demand for your product is inelastic,…
A: Inelastic price elasticity of demand implies a percent change in price causes quantity demanded to…
Q: You work for a company that produces statistical software used by professional 3. researchers and…
A: Answer: Given, Price elasticity of demand of researchers = -0.3 (inelastic demand) Price elasticity…
Q: A Restaurant manager decides to lower the price of a featured sandwich from Rs. 500 to Rs. 400, and…
A: Elasticity: It is used for measuring the change in the behavior of buyers and sellers due to a…
Q: Explain: as an entrepreneur how can you use this concept of elasticity of demand in providing better…
A: Elasticity is defined as the responsiveness or sensitiveness on the demand if the factor influencing…
Q: What will be the value of price elasticity if the demand for a product is relatively elastic? a.…
A: The elasticity of demand measures the percentage by which the quantity demanded will change when the…
Q: Suppose you could buy shoes one at a time, rather than in pairs. What do you predict the cross-price…
A: According to question one can purchase only one shoe at a time either left shoes or the right shoes.…
Q: Which of the following statements is not true? a. When price elasticity of demand is very high,…
A: Option A is not true
Q: Use the endpoint method to compute the price elasticity on D1. The endpoint method computes the…
A: The quantity demanded of a good refers to the amount of the good demanded by the consumers of the…
Q: Tim makes twice as much money as his brother Andrew, but they equally like to go to baseball games.…
A:
Q: A good that has a lot of substitutes, that is a necessity and is relatively inexpensive will most…
A: A necessary good is a good for which a change in price will not significantly affect its quantity…
Q: When the price of kittens was $20 each, the pet shop sold 20 per month. When they raised the price…
A: Elasticity of demand states that percentage Change in quantity demanded due to percentage change in…
Q: Recently, in Beijing, the price of Quduoduo cookies fell from $0.80 to $0.70. As a result, the…
A: The value of elasticity of demand being negative showing that as a result of decrease in price the…
Q: The price decreases from $2,000 to $1,800. Quantity demanded per year increases from 5000 to 6000…
A: Price elasticity of demand refers to the responsiveness of quantity demanded to a change in the…
Q: You work in the marketing department of a major telecommunications company. You discover that demand…
A: The degree to which demand responds to a change in another economic element, such as price, income…
Q: For a normal negatively sloped demand curve, starting from the lowest price and going toward the…
A: Answer: Correct option: option 2 Explanation: For a negatively sloped demand curve, starting from…
Q: MICROECONOMICS In a given market the demand curve is the following: D(p) = 277 - 4p. Determine the…
A: Given that, Market demand curve is D(p) = 277-4p
Q: Billy Bob's Barber Shop knows that a 5 percent increase in the price of their haircuts results in a…
A: Price elasticity of demand = %∆Q/%∆P
Q: Figure: The Demand for Shirts) Use Figure: The Demand for Shirts. The price elasticity of demand for…
A: At Point A Price = 60 and Quantity = 0 At Point B Price = 50 and Quantity = 100
Q: How would you expect the elasticity of demand for each of the following products to compare with the…
A: Disclaimer :- as you posted multipart questions we are supposed to solve the first 3 questions only…
Q: when the price of a kettle increases from OMR 15 to OMR 20, the quantity demanded drops from 3550…
A: The price elasticity of demand is basically a measurement of how a product's consumption changes in…
Q: XYZ Co. makes a processor that requires a metal that can be found in a single mine in Peru. Do you…
A: It is inelastic,The price of metal stretching will be inelastic because it is the only source where…
Q: Do you think a tutoring business sells a relatively elastic or inelastic product/service? Mention…
A: Elasticity is a term used in economics to describe how a good or service's total quantity demanded…
Q: Suppose the price elasticity of demand for gasoline is 0.7 and the price elasticity of demand for…
A: Elasticity measures the responsiveness of quantity demanded with respect to change in price of a…
Q: what is the importance of price elasticity of demand to pricing managers
A: Pricing managers aim is to set the price that maximize firm's profit. Price elasticity of demand is…
Q: Demand is ________ when a change in price leads to a relatively larger change in the quantity…
A: Elasticity is an important concept in economics, used to determine the relative change in quantity…
Q: Which of the following is most likely to have a low price elasticity of demand? A good that is very…
A: Answer: The demand for goods that are expansive, luxurious, and goods having many substitutes will…
Q: Q2. At a given market price of a good a consumer buys 120 units. When price falls by 50 per cent he…
A: Price elasticity of demand is a measure of the degree of responsiveness of changes in demand caused…
Q: Billy Bob's Barber Shop knows that a 5 percent increase in the price of their haircuts results in a…
A:
Q: Suppliers of computer disks should ___________ the price of disks to increase their total revenue if…
A: When demand is inelastic (elastic), an increase (decrease) in price will increase total revenue.…
Q: why do you think brand-named goods are more elastic or less elastic than categories, especially when…
A: There is high competition between every brand and between branded and other non branded items.…
Q: Suppose the price elasticity of demand for gasoline is 0.7 and the price elasticity of demand for…
A: The price elasticity of demand is the ratio of percentage change in quantity demanded and percentage…
Q: If cream cheese and bagel are good compliments for consumers, then it is likely that: their…
A: The percentage change(increase/decrease) in quantity demanded of a particular product owing to a…
Q: Which of the following statements about elasticity is true Select one: O a. Values that are further…
A: Elasticity measures the percentage change of one economic variable in response to a change in…
Q: You are the marketing manager of a farm. How will you transform its price elastic products, such as…
A: Price elasticity of demand is an economic variable that measures the responsiveness of quantity…
Q: The price of a good rises from $12 to $15. Quantity supplied increases from 25,000 to 35,000. Using…
A: Economists use the idea of elasticity to assess how sensitive supply and demand are to changes in…
Q: When the percentage change in demand and price are the same, _______. a. It is perfectly elastic b.…
A: Elasticity measures how responsive the demand is towards the changes in price. It is measured by…
Q: You work in the marketing department of a major telecommunications company. You discover that demand…
A: Demand for phone calls during business hours is inelastic. It means demand for phone calls during…
Q: A 10% percentage change in the income of a person resulted in 25% change in his demand for a…
A: Income elasticity measures how responsive the quantity demanded of the product is towards any change…
Suppose you are a business owner. Discuss how you would use various demand elasticities (own-price, cross-price & income) in your decision making process.
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
- 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?You are the marketing manager of a farm. How will you transform itsprice elastic products, such as carrots and potatoes, into price inelasticproducts in order to gain more profit margins?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?
- MicroEconomics Practice: Eric has a taco stand in downtown San Francisco. He wants to increase his total revenue. He knows that, when tacos are $1.00, he sells 20 an hour, and when he lowers the price to $0.75, he sells 25 an hour. (a) Calculate the price elasticity of demand for Jose's hotdogs using the midpoint formula. (show the formula and your calculations) (b) Is demand elastic or inelastic? How do you know? Explain your answer. (c) Using the price elasticity of demand calculated in section A, explain whether Eric should raise or lower the price to generate more revenue.Choose a product which you are familiar with. Using the internet for research (please cite your source), what is the price elasticity of demand for this product or group of products? What does that mean with respect to a 10% increase in the price of this good? What happens to quantity demanded? Which of the 4 determinants of price elasticity of demand do you believe drives this outcome about the good's price elasticity? If there is more than one determining factor, please explain your reasoning. [for many goods, all of the 4 determinants come into play - I just want you to choose the one or two that you believe are most relevant).Recently and Texas the price of Twinkies fell from $.80-$.70 as a result the quantity demanded of cakes decreased from 120 to 100 what would be the appropriate elasticity to compute using the midpoint method compute this elasticity what does your answer tell you
- If you wanted to increase demand for your restaurant butare unable to lower prices or increase advertising, whatsteps might you take?What if a new restaurant entry increased consumer elasticity of demand for the sushi appetizer from 2 to 3? The price you charge initially was $10. By how much do you have to adjust the price? Will you still be able to make a profit? Show/explain step by step.Why do suppliers want to create more inelastic demand relationships in the products that they sell?
- Price elasticityExplain how a store can sell more elastic goods1. Your younger brother needs $600 to buy a new computer. He has opened a sandwich stand to make the money he needs. Your father is paying for all of the ingredients. He currently is charging $2 per sandwich, but he wants to adjust his price to earn the $600 faster. If you know that the demand for sandwich is elastic, what is your advice to him? Explain.
