Using the midpoint method, the price elasticity of demand for cashews between the price levels of $15 and $9 per ton isthese two points, demand isThus, you can conclude that the grower's claim isdue to the favorable weather conditions.ITotal Revenue (Thousands of Dollars)Imeaning that betweenbecause total revenue willConfirm your previous conclusion by calculating total revenue in the cashew market before and after the favorable weather conditions. Enter thesevalues in the following table.Before Favorable Weather Conditions After Favorable Weather Conditions The following graph illustrates the market for cashews. It plots the monthly supply of cashews and the monthly demand for cashews. Suppose astretch of unseasonably good weather occurs, allowing cashew growers to produce more cashews per hectare.Show the effect this shock has on the market for cashews by shifting the demand curve, supply curve, or both.Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps backto its original position, just drag it a little farther.PRICE (Dollars per ton)30241812600122436DemandQUANTITY (Thousands of tons)Supply4860DemandSupply?A number of the growers are concerned about the price decrease initiated by the stretch of favorable weather conditions, as they believe it will lead todecreased revenue. Using elasticities, you will be able to determine whether this price change will lead to a rise or fall in total revenue in this market.

Price elasticity of demand: It measures the percentage change in the quantity demanded for a 1%…

Using the midpoint method, the price elasticity of demand for cashews between the price levels of $15 and $9 per ton is these two points, demand is ▼. Thus, you can conclude that the grower's claim is due to the favorable weather conditions. , meaning that between because total revenue will Confirm your previous conclusion by calculating total revenue in the cashew market before and after the favorable weather conditions. Enter these values in the following table. Total Revenue (Thousands of Dollars) Before Favorable Weather Conditions After Favorable Weather Conditions

Using the midpoint method, the price elasticity of demand for cashews between the price levels of $15 and $9 per ton is these two points, demand is ▼. Thus, you can conclude that the grower's claim is due to the favorable weather conditions. , meaning that between because total revenue will Confirm your previous conclusion by calculating total revenue in the cashew market before and after the favorable weather conditions. Enter these values in the following table. Total Revenue (Thousands of Dollars) Before Favorable Weather Conditions After Favorable Weather Conditions

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Find the elasticity of scale and the elasticity of substitution for the CES production function: 1 1 f(x₁, x₂) = (x³ + x2)³. Solution: We first calculate the marginal products: 2 fx₁ = 3 + = x1fx1 -+ 2 2 10 - ² ( x² + x ) ( + x^²) = ( + + + + ² ) 15 ²0 x² -2/3 x₂ + x2fxz Elasticity of scale = _1₁_+_*__*(+)´<°¸«d«)*;»_ f(x1, f(x1, ‹2)² = -2/3 r2/3 = TRS = t (where TRS = =t). ⇒ r = t³/² ⇒ ln(r) = ln (t) and o = -2/3 dln (r) dln (t) To get elasticity of substitution, we first need TRS and denote r = 1 x3 X1 TMS - F (+4+2)0 = fx₁ fx₂ 2 1 + x²) x₂² MIN x2 3 -2/3 (x² -2/3 2 2/3 2/3 x1 -2/3 = r²/3 x¹/3 + 1/3 = 1.
Worldwide quarterly sales of a brand of cell phones were approximately q = −p + 156 million phones when the wholesale price was $p. (a) If the cellphone company was prepared to supply q = 4p − 384 million phones per quarter at a wholesale price of $p, what would have been the equilibrium price? $ (b) The actual wholesale price was $103 in the fourth quarter of 2004. Estimate the projected shortage or surplus at that price. There is an estimated ______ of million phones.
In one month, a Pizza Hut restaurant sold 5500 personal pizza at RO 4.50 per pizza. When this restaurant increased its price by 30%, its total revenue for the next month increased to RO 18,720. As a result of this price increase, however, the monthly sales of POP decreased from 3500 to 3000 cans. Using the arc elasticity method: (i) Find the own price elasticity of demand for this restaurant’s pizza. (ii) Find the cross elasticity of demand for pop with respect to the price of the pizzas. Are the two substitutes or compliments?
Sunglasses manufacturer Oakley, Inc. produces high-end and low-end versions of their performance sunglasses. They estimate that the demands for their products are given by: High-end sunglasses: P = 130 - 2QH , and Low-end sunglasses: P = 80 - QL, where Q is measured in 1000 sunglasses, "H" denotes High-end and "L" denotes Low-end Both types of sunglasses are produced on the same production line in the same facility, so the marginal cost of producing and selling both types of sunglasses is constant at $30. Supposing that (i) the two demands are independent and (ii) Oakley can produce and market the sunglasses such that the high- and low-end markets are successfully segmented, what are the profit-maximizing prices Oakley would charge for each version? O PH = $80 and PL= $55. O By the "midpoint rule", PH = $65 and PL = $40. O PH = $130 and PL = $80. O Oakley will set price equal to marginal cost for both versions, i.e., P = $30.
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Worldwide annual sales on smart phones over a two year period were approximately q=-5p+3090 million phones at the selling price of $p per phone. (a) obtain a formula for the price elasticity of demand E. E=______ (b) in one of the years the actual selling price was $355 per phone. What was the corresponding price elasticity of demand? E=______ The demand is going (up/down) by about _____% per 1% increase in that price level.
A company producing cell phone cases uses either rubber (zy) or plastic (₂) with the following production function: y=+ where y stands for the number of cases produced, and az, and a stand for, respectively, the amount of rubber and the amount of plastic used (both in ounces). 1st attempt See Hint Suppose the firm has signed a contract to purchase 180 ounces of rubber. This contract must be honored. Furthermore, the rubber has a very short shelf life if not used for production. That is, if the rubber is not used immediately, it will be wasted. Let wy be the price of an ounce of rubber, and we be the price of an ounce of plastic. Suppose the firm wants to make 430 cell phone cases. The conditional factor demand for ounces of plastic totals 5, and zero otherwise.
AJM distributors has hired you to provide financial advice on a product being sold. They have supplied the following information: The equation: p= 40 - x 4 Using the above equation they would like you to supply information regard to pricing of one of their new products. Make an analysis of the price elasticity of demand obtained from the function given, informing all of the members of the team: -procedure of calculation -Analysis of value obtained -Explanation on how various values of elasticity can affect the profitability of the company Explain the implications (if any) by setting p at a value of $25 vs $30 Advise on how this price increase to $30, will affect the demand for the product and the profitability to the company.
Q3. Refer to the diagram. Using the midpoint formula, calculate the price elasticity of demand between the prices of $15 and $12. Accordingly, state whether demand is elastic or inelastic between these two points. P$/unit 15 12 D 18 22 Q (units/week) Ep = Damand ie ... Q4. For each case below, answer the bolded questio Classification of the Case Calculations product(s) if requested to do so 1. Suppose that a 2% increase in income in the economy decreases the quantity of gadgets demanded by 1% ar every E,= Gadgets are possible price. Find the income elasticity of demand and dassify the product accordingly (state whether gadgets is a normal, necessity, luxury or an inferior product). 2. A firm finds that its price elasticity of demand is 4.0. Currently, the firm is selling 2000 units per month at $5 per unit. Price must be lowered by= If it wishes to increases its quantity sold by 10%, by how much it must lower its price? 1 Suppose legalization-and subseque nt regulation-of products Xand…
Every year in September, the NFL (National Football League) announces official prices of their next Superbowl tickets. The official ticket prices for 2020 Superbowl ticket in the NFL official websites started from $4,500 per person and it was up to over $12,000 per person depending on the location of the seats from the field. However, about three fourth of all tickets were already distributed to the NFL teams. The other one fourth are distributed to the media, NFL partners and sponsors. As a result, a small fraction of a total of about 80,000 tickets were sold in the secondary market. Those tickets were available to buy and sell in the official NFL online sites and other ticket brokers. Given the limited supply of tickets available to the NFL fans to purchase, the actual prices are dominated by the wide fluctuation of demand caused by many factors such as the venue of the game, the winning teams for the championship match, the packages of tickets offered by the brokers, and the weather…
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PRICE (Delars per tor 18 24 M 4 12 24 QUANTITY (Thousands of tons) Supply Demand O Total Revenue (Thousands of Dollars) Demand Supply Several growers are happy with this advancement in technology because now they can sell more crops, which they believe will lead to increases in revenue. Using elasticities, you will be able to determine whether this price change will lead to a rise or fall in total revenue in this market. Using the midpoint method, the price elasticity of demand for pistachios between the price levels of $15 and 59 per ton is 0.33, meaning that between these two points, demand is inelastic. Thus, you can conclude that the grower's claim is incorrect because total revenue will increase due to the technological improvement. Confirm your previous conclusion by calculating total revenue in the pistachio market before and after the technological improvement. Enter these values in the following table. Before Technological Improvement After Technological Improvement