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- Q2 The manufacturer of a low-sugar bottled juice estimated the following demand equation for its product using data from 25 retail stores around Dover city for the month of November: Q=-2000-15 Pje+ 8.4Px + 0.51 + 0.4A (220) (5.0) (5.6) (0.2) (0.16) R²=0.57 n=25 F = 6.83 Assume the following values for the independent variables: Standard error 1 Q denotes quantity sold per month Pje (denotes price of the bottled juice) = 240 (in cents) P. (denotes price of leading competitor's product) - 300 (in cents) I (denotes per capita income of the standard residential district in which the retail store is located) = 4000 (in dollars) A (denotes monthly advertising expenditure) = 7700 (in dollars) Using this information, answer the following questions: a. Compute elasticities for each variable.. b. Do you think that this firm should cut its price to increase its market share? Explain..When the price of a gallon of milk increases from $6 to $8, quantity demanded decreases to 27 gallons. Assuming the price elasticity of demand for milk is -0.3, what is the original quantity demanded? (assuming further that this is the point elasticity relative to the original point on the demand curve.) Please make sure you give a numerical answer with no units and/or space or period (.) or comma (,) before or after your answer. Enter your answer hereThe quantity of hot dogs buns demanded at a price of $1.59 increased from 100units to 130unite during the week that hot dogs went on sales for $1.89 rather than the regular price of $2.59. (a) what data points (P1 Q1) (P1 Q2) would you use to calculate the cross elasticity of demand for hot dogs and buns? (b) would the cross elasticity of demand be positive, zero or negative? What does this represent in economics terms? (c) the next time hot dogs went on sales, the price of buns was increased to $1.79 and only 120 buns was sold. Was this a good business decision? Why/why not?
- Consider the demand function for bicycles in South Florida: Q = 24 + 3Y – 1.2P where: Q is quantity demanded, Y is monthly income, and P is the price per unit. If/when P = $54, and Y = $2,300, (a) Find the quantity of bicycles that would be sold. (b) Calculate the amount of the seller's total revenue. (c) Compute the price-elasticity of demand (Ep) for bicycles. (d) Interpret your result in (c). (e) Compute the income-elasticity of demand (Ey) for bicycles. (f) Interpret your result in (e).The demand function for an item is given by d(x) = 100/ 0.01x 2 + 1 (20 ≤ x ≤ 50) where d(x) (measured in units of a thousand) is the quantity demanded per weak and x is the unit price in dollars. (a) Find the rate of change in demand with respect to price. (b) How fast is the demand changing at price equal to 30 (x = 30)?Suppose the demand for a product is given by D(p) : - 4p + 232. A) Calculate the elasticity of demand at a price of $16. (Give your answer to three decimal places.) Elasticity = B) At what price do you have unit elasticity? (Round your answer to the nearest penny.) Price = $
- Tutorial Exercise Worldwide annual sales of smartphones in over a 5 year period were projected to be approximately q = −10p + 4,540 million phones at a selling price of $p per phone. (a) Obtain a formula for the price elasticity of demand E. (b) In one particular year the actual selling price was $277 per phone. What was the corresponding price elasticity of demand? Interpret your answer. (c) Use your formula for E to determine the selling price that would have resulted in the largest annual revenue. What, to the nearest $10 million, would have been the resulting annual revenue? Step 1 (a)Obtain a formula for the price elasticity of demand E. Recall that the price elasticity of demand E is the percentage rate of decrease of demand divided by the percentage increase of price, given by the formula. E = − dq dp · p q We are already given the formula q = −10p + 4,540 for the demand of smartphones (in millions). First, we find the derivative…In this problem, p is in dollars and q is the number of units. (a) Find the elasticity of the demand function p + 69 - 300 at (9, p) = (25, 150). (b) How will a price increase affect total revenue? O Since the demand is elastic, an increase in price will decrease the total revenue. Since the demand is inelastic, an increase in price will decrease the total revenue. O Since the demand is elastic, an increase in price will increase the total revenue. Since the demand is unitary, there will be no change in the revenue with a price increase. Since the demand is inelastic, an increase in price will increase the total revenue. Need Help? Read It Watch It4x+200 A garden shop determines the demand function q = D(x) = 30x+9 during early summer for tomato plants where q is the number of plants sold per day when the price is x dollars per plant. (a) Find the elasticity. (b) Find the elasticity when x = 2. (c) At $2 per plant, will a small increase in price cause the total revenue to increase or decrease? (a) The elasticity is
- Worldwide annual sales of smartphones over two year period were approximately q=-5p+3040 million phones at a 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 $375 per phone. What was the corresponding price elasticity of demand? E=_______ The demand was going down by about _____% per 1% increase in price at that price level. (c) Use your formula for E to determine the selling price that would’ve resulted in the largest annual revenue. $_______ What would’ve been the resulting annual revenue? (Round your answer to two decimal places) $_____billionthe demand equation for a product is q=1.5p+600, where q is the number of a products that can be sold in a month and p is the price per product. (a) what price will produce the largest revenue? (b) what is the largest monthly revenue?Suppose the demand for a product is given by - 8p + 173. D(p) A) Calculate the elasticity of demand at a price of $9. = Elasticity = (Round to three decimal places.) B) At what price do you have unit elasticity? (Round your answer to the nearest penny.) Price = $