4. An economic consultant for X Corp. recently provided the firm's marketing manager with this estimate of the demand function for the firm's product: Q = 12,000 – 3P, + 4P,– 1M + 2A, %3D where Qxd represents the amount consumed of good X, Px is the price of good X, Py is the price of good Y, M is income, and Ax represents the amount of advertising spent on good X. Suppose good X sells for 200 per unit, good Y sells for 15 per unit, the company utilizes 2,000 units of advertising, and consumer income is 10,000. How much of good X do consumers purchase? Are goods X and Y substitutes or complements? Is good X a normal or an inferior good?

4. An economic consultant for X Corp. recently provided the firm's marketing manager with this estimate of the demand function for the firm's product: Q = 12,000 – 3P, + 4P,– 1M + 2A, %3D where Qxd represents the amount consumed of good X, Px is the price of good X, Py is the price of good Y, M is income, and Ax represents the amount of advertising spent on good X. Suppose good X sells for 200 per unit, good Y sells for 15 per unit, the company utilizes 2,000 units of advertising, and consumer income is 10,000. How much of good X do consumers purchase? Are goods X and Y substitutes or complements? Is good X a normal or an inferior good?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

8
Please match the following: ✓ Assume that both the demand curve and the supply curve for DVD players shift to the left but the demand curve shifts more than the supply curve. As a result ✓ Assume that both the demand curve and the supply curve for DVD players shift to the left but the supply curve shifts more than the demand curve. As a result ✓ Assume that the demand curve for DVD players shifts to the left and the supply curve for DVD players shifts to the right, but the supply curve shifts more than the demand curve. As a result ✓ Assume that the demand curve for DVD players shifts to the left and the supply curve for DVD players shifts to the right, but the supply curve shifts less than the demand curve. As a result A. Both the equilibrium price and quantity of DVD players will increase. B. Both the equilibrium price and quantity of DVD players will decrease. C. The equilibrium price of DVD players will increase; the equilibrium quantity will decrease. D. The equilibrium price of…
The diagram to the right illustrates a hypothetical demand curve representing the relationship between price (in dollars per unit) and quantity (in 1,000s of units per unit of time). 100- 90- Total revenue is $ (Enter your response as an integer.) 80- 70- 60 60- 50- 40- 30- 20- 10- D 30 0- 10 20 30 40 50 60 70 80 90 100 Quantity (1,000s of units per unit of time) Price (dollars per unit)
10) The proprietor of the Shaw Music Mania Store calculates the demand equation for a certain brand of CDs to be q = -50p + 2000 , where p is the price it charges per disc and q is the number of discs sold in a day. Determine the maximum total annual revenue and the price at which the max revenue occurs.
Question #2 Consider the following demand function for frozen dinners where QD is the quantity of frozen dinners demanded per week, P is the price per frozen dinner, PF is the price per fast food meal, Y is the average yearly consumer income, and A is the number of advertisements for frozen dinners. Demand Function for Frozen Dinners: QD = 1,000 – 10P + 20PF – 0.01Y + A Suppose that a frozen dinner sells for $4, a fast food meal sells for $6, average yearly consumer income is $50,000, and that there are 20 advertisements for frozen dinners. Calculate and interpret the income elasticity of demand. Calculate and interpret the cross-price elasticity of demand with respect to fast food meals.
Suppose the demand function for smart phones is given by Q(P) = AP¹-a 1-a where A> 0 and a > 1. Use calculus to show that the price elasticity is equal to 1 — a everywhere along the whole curve. (Hint: Recall that if f(x) = x³, then ƒ'(x) = ßxß-¹). Interpret this result.
Please show full steps
Problem Number 8 Economics: Elasticity of Demand for DVD Rentals. The demand for DVD rentals at Klix Video is given by q= D(x) = 120 - 20x, where q is the number of DVDs rented per day at x dollars per rental. Find each of the following. a) The elasticity as a function of x b) The elasticity at x = 2 and at x = c) The value of x for which E(x) = 1. Interpret the meaning of this price. d) The total-revenue function, R(x) = (x) D(x) e) The price x at which total revenue is a maximum 4. Interpret the meaning of these values of the elasticity.
Can I get the answer for 3,4&5 please
The demand functions for a pineapple is given by p=-0.10x+15. a.) find the revenue function b.) how many pineapples will you sell when you are maximizing revenue? c.) what price gives the maximum revenue and what is the maximum revenue?
Suppose a firm is currently selling 1,000 units of output at a price of $8 per unit and has an advertising budget of $400. Suppose further that the firm can sell one more unit of output by either a $0.02 price discount or by a $8.00 increase in advertising expenditure. Is the firm’s advertising budget optimal? If not, determine the optimal advertising budget.
Gr8 Ideaz Inc. has determined that the demand function for their heated socks is given by: 5 7P². a. Find E(p), the Elasticity of Demand as a function of price, p. E(p) = b. Find the Elasticity of Demand when heated socks are selling at a price of $10. Give result accurate to at least 3 decimal places. E(10) = c. At this price ($10): We would say the demand for heated socks is: Select an answer Based on this, in order to increase revenue we should: Select an answer d. Use the Elasticity model to determine the price that maximizes revenue. (Round result to 2 decimal places.) D(p) = = 345- p=