ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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- Demand for Corn Flakes is: P = 14 - Q. Supply of Kellogg's Corn Flakes is: P = 2 + Q. Now a generic company enters the market, selling generic Corn Flakes for $4. Assume consumers are indifferent between generic and Kellogg's Corn Flakes. When the generic corn flakes enter the market, Kellogg's will sell how many less boxes of their own cereal?arrow_forwardYou sell two different goods: printers and toner cartridges. The price elasticity of demand for the printers is -3.4, and you earn a revenue of RM15,000 per month from the good. You earn a revenue of RM5,000 per month from the toner cartridges. The cross price elasticity of demand for both of the goods is -2.5. If you decide to decrease the price of the printers by 5%, calculate your new total revenues for both of the goods. [Anda menjual dua barang berbeza: pencetak dan kartrij toner. Keanjalan harga permintaan untuk pencetak adalah -3.4, dan anda memperoleh jumlah hasil sebanyak RM15,000 sebulan memperoleh jumlah hasil RM5,000 sebulan untuk kartrij toner. Keanjalan permintaan silang bagi kedua-dua barang adalah -2.5. Sekiranya anda membuat keputusan untuk menurunkan harga pencetak sebanyak 5%, hitung jumlah hasil baharu anda untuk kedua-dua barang tersebut.] (c) untuk barang tersebut. Andaarrow_forwardRequired information You are the manager of a firm that receives revenues of $20,000 per year from product X and $80,000 per year from product Y. The own price elasticity of demand for product X is −3 and the cross-price elasticity of demand between products Y and X is −1.6. Suppose you increase the price of good X by 2 percent. Assume that the information about product X and product Y from the problem changed to the following: Revenues per year from product X $ 15,000 Revenues per year from product Y $ 80,000 Own price elasticity of demand for product X −3 Cross-price elasticity of demand between products X and Y −1.4 Price increase of product X (percent) 3 Instruction: Update the data in your spreadsheet to the values above and enter the recomputed answer for the original question. Required: How much will your firm’s total revenues (revenues from both products) change? Change in revenues: ____________________arrow_forward
- You are the manager of a firm that receives revenues of $60,000 per year from product X and $80,000 per year from product Y. The own price elasticity of demand for product X is -1.5, and the cross- price elasticity of demand between product Yand X is -1.4. How much will your firm's total revenues (revenues from both products) change if you increase the price of good X by 2 percent? Instructions: Enter your response rounded to the nearest dollar. Use a negative sign (-) if applicable. %24arrow_forwardProblem 03-06 (algo) You are the manager of a firm that receives revenues of $40,000 per year from product X and $80,000 per year from product Y. The own price elasticity of demand for product X is -1.5, and the cross-price elasticity of demand between product Yand X is -1.8. How much will your firm's total revenues (revenues from both products) change if you increase the price of good X by 1 percent? Instructions: Enter your response rounded to the nearest dollar. If you are entering a negative number, be sure to use a (-) sign. GAarrow_forwardDemand for Corn Flakes is: P = 17 - Q. Supply of Kellogg's Corn Flakes is: P = 2 + Q. Now a generic company enters the market, selling generic Corn Flakes for $5. Assume consumers are indifferent between generic and Kellogg's Corn Flakes. How many boxes of corn flakes will sell in total (both brand and generic)? Enter as a value.arrow_forward
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- Every month a certain firm purchases exactly 50 bottles of water to restock its kitchen, regardless of price. Assume that the whole water stock is consumed during the work week and that no extra bottles will be purchased. What is the firm's own price elasticity of demand for this product in absolute value?arrow_forwardAccording to data from the U.S. Department of Energy, sales of the fuel-efficient Toyota Prius hybrid fell from 194,108 vehicles sold in 2014 to 180,603 in 2015. Over the same period, according to data from the U.S. Energy Information Administration, the average price of regular gasoline fell from $3.36 to $2.43 per gallon. Using the midpoint method, calculate the cross-price elasticity of demand between Toyota Priuses and regular gasoline. According to your estimate of the cross-price elasticity, are the two goods complements or substitutes? Does your answer make sense?arrow_forwardIf Starbucks’s data analytics department estimates the income elasticity of demand for its coffee to be 2.5, how will the prospect of an economic boom (expected to increase consumers’ incomes by 5 percent over the next year) impact the quantity of coffee Starbucks expects to sell?Instruction: Enter your response rounded to two decimal places. It will change by _____ percent.arrow_forward
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