As a firm decreases its price more and more, what would be true about the demand elasticity that would be required to hold the firm's total contribution margin constant? 1) It would be impossible to tell without more information 2) It would go down 3) It would stay the same 4) It would go up
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- Time left 0:33:. 16) Based on the following information, which fast food product do consumers see as the closest substitute for Wendy's Hamburgers? O a. Kentucky Fried Chicken, which has a cross elasticity of 1.70 with Wendy's. Ob. McDonalds hamburgers, which have a cross elasticity of 1.01 with Wendy's. C. Pizza Hut pizza, which has a cross elasticity of zero with Wendy's. O d. Burger King, which have a cross elasticity of -1.25 with Wendy's. Clear my choice je Next pageGood U has a price elasticity of demand of 2.5 and Good Y has a price elasticity of demand of 0.7. Which of the following statements below describes these elasticities? O U has fewer substitutes than Y. O The elasticity of U is likely to be a short-run measure and the elasticity of Y is likely to be a long-run measure. U is a luxury and Y is a necessity. O U is a good when there is an increase in income and Y is a good when there is a decrease in income. 22 56. ans 57 a MacBook Air esc F1 F2 F3 F4 F5 #3 24 3 Q W E T tab A S F os lock C VTo say there is an elastic demand for a product means that O consumers are not very responsive to a change in the price of the product. there are relatively few substitutes, few competitors, and a short time period under consideration. O there is a positive relationship between price and total revenue. O consumers are very responsive to a change in the price of the product.
- explain how the demand curves for normal productsand for prestige products differ. What are demandshifts and why are they important to marketers? Howdo firms go about estimating demand? How can marketers estimate the elasticity of demand?Using the supply and demand equations given below: Demand Qd = 25 – 2PSupply Qs = 1 + P If the price falls from $8 to $7:a. Compute for the own price arc elasticity of demand. Provide an economic interpretationof your computed value (this is different from what is asked next) and classify the good according tothe type of elasticity. b. Compute for the price elasticity of supply. Provide an economic interpretation of yourcomputed value and classify the good according to the type of elasticity. 1. What is the relationship between total revenue and own-price elasticity of demand? 2. Illustrate a situation when the producer of a good will have a greater tax incidence than a consumer.What does elasticity have to do with tax incidence?. UT Sports, a store that sells various types of sports clothing and other sports items, is planning to introduce a new design of World Cup Kits. A consultant has estimated the demand curve to be Q= 8400 – 420 P Where Q is cap sales and P is price. How many KITs could UT sell at $25.2 each? How much would the price have to be to sell 7,560 KITs? Suppose UT were to use the KITs as a promotion. How many KITs could UT give away free? At what price would no KITs be sold? Calculate the point price elasticity of demand at a price of $ 25.2.
- A TV channel has estimated the demand for its service to be givenby the following function: Q=9.83p-1.2A2.5Y1.6P0-1.4whereQ = monthly sales in unitsP = price of the service in $A = promotional expenditure in $’000Y = average income of the market in $’000P0 = price of ‘home movies’ in $ The current price of the TV channel is $60, promotional expenditure is$120,000, average income is $28,000, and the price of ‘homemovies’ is$45.Indicate whether the following statements are true or false, givingyour reasons and making the necessary corrections h. Current sales are over a million units a month. i. The demand curve for the channel is given by:Q=9.83p-1.2j. The channel’s sales are more affected by the price of ‘home movies’ than by the price of its own service.k. If the channel increases its price this will reduce its profit.3. Derive the MR function for the demand function q = 400 - 0.1p.A) Derive the demand function B) Analyze thefeatures of function elements of a and b PLEASE ANSWER
- The following graph shows the demand for a good. PRICE (Dollars per unit) 280 180 140- 40 0 W 10. 35 45 QUANTITY (Units) Demand For each region on the graph given in the following table, use the midpoint method to identify whether the demand for this good is elastic, (approximately) unit elastic, or inelastic.Creative Homework/Short Project Assume that you arean entrepreneur who runs a bakery that sells glutenfree breads and cakes. You believe that the currenteconomic conditions merit an increase in the price ofyour baked goods. You are concerned, however, thatincreasing the price might not be profitable becauseyou are unsure of the price elasticity of demand for yourproducts. Develop a plan for the measurement of priceelasticity of demand for your products. What findingswould lead you to increase the price? What findingswould cause you to rethink the decision to increaseprices? Develop a presentation for your class outlining(1) the concept of elasticity of demand, (2) why raisingprices without understanding the elasticity would bea bad move, (3) your recommendations for measurement, and (4) the potential impact on profits for elasticand inelastic demandWhat factors must a firm consider when deciding to raise or lower its price? In answering this question think about the content in Chapters 3 and 4 and use a real-world example that helps illustrate your answer. Chapter 3 and 4 are refering to supply and demand. How to measures of elasticity to describe how much the denand fr a firm's product can be affected by those variables. How a firm chooses its optimal mix of inputs to produce its output. What are prespective of elatic or inelastic. It speaks of the variables that can influence the demand for a firm's product. The relevant costs that a firm faces in its decision-making
