Assume that a retailer sells 1000 six-packs of Pepsi per day at a price of $3.25/six-pack. You as aneconomic analyst, estimate that the cross-price elasticity between Pepsi and Coca-Cola is 0.6. If theretailer raises the price of Coca-Cola from $3.00 to $3.30/six-pack, how would sales of Pepsi be affected,ceteris paribus?Sales of Pepsi would not be affected at allSales of Pepsi would rise by 30 six-packsSales of Pepsi would rise by 60 six-packsа.b.с.d. Can't tell; insufficient information

Given Information-There are two goods Pepsi and Coca-Cola. The quantity sold of Pepsi is equal to…

Answered: Assume that a retailer sells 1000…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Data from the Bureau of Labor Statistics shows that U.S. income increased by 10% while consumer data shows that the quantity demanded of organic lemonade drinks changed from 80 to 85. Compute the income elasticity for organic lemonade drinks, is organic lemonade a normal or an inferior good?
Suppose the price elasticity of demand for coke is −3 and the cross-price elasticity of demand between coke and the price of Pepsi is 2.2. If the price of Pepsi decreases by 5%, what would happen to the demand for coke and what would have to happen to the price of coke to exactly offset the fall in the price of Pepsi and leave the quantity demanded of coke unchanged, respectively?
Jeremy's (own) price elasticity of demand is 7.89 in absolute terms. Whenthe price rises from $4 to $13 what do you predict will be his percentagechange in quantity demanded?
Please help with following question Suppose the own price elasticity of demand for good X is -4, its income elasticity is 2, its advertising elasticity is 3, and the cross price elasticity of demand between it and good Y is -6. Determine how much the consumption of this good will change if: The price of good X increases by 10%. The price of good Y decreases by 5%. Advertising increases by 14%. Income decreases by 8%. thanks
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Problem 2: Last week, the price of envelopes was Php 150 a box, and Julie was willing to buy 10 boxes. Today, the price has gone up to Php 175 a box, and Julie is now willing to buy 8 boxes. What is Julie's elasticity of demand? Is Julie's demand for envelopes elastic or inelastic?
Netflix raises the price of its service from $11 per month to $14 per month. This causes the number of people subscribing to HCCCtinder – a school-specific dating app – to rise from 2,200 to 2,500. What is the cross-price elasticity of demand? Based upon your answer, are Netflix and HCCCtinder substitutes or compliments?
Suppose the cross-price elasticity of café latte to the price of milk is -0.6. If the price ofmilk rises by 20%, what happens to the quantity of lattes demanded? What can you say aboutthe relationship of these two goods?
When the first automobiles were built in 1901, they were made by skilled workers using hand tools. Later, in 1913, Henry Ford introduced the moving assembly line, which lowered costs and speeded production. Over the years, the production line has become ever more mechanized, and today robots replace people in many tasks. Search The graph below shows the demand curve for cars in 1901. Suppose the least-possible cost of producing a car is $250 and that the efficient scale is 0.5 cars a day. D Draw the average total cost curve in 1901. Label it ATC₁ 500- 400- Price (dollars per car) 300- Q SON The graph below shows the demand curve for cars in 2020. Suppose the least possible cost of producing a car is $10,000 and that the efficient scale is 200,000 cars a day Draw the average total cost curve in 2020 Label it ATC₂ Price (dollars per car) 50,000 40,000 30,000+ Next Q
A gas station owner observed that when he increased the price of gasoline, his total revenue declines. What does that tell us about the relative elasticity of demand for gas at this gas station? Is it elastic, inelastic, or unit elastic? How can you determine the relative elasticity?
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If a complementary price of an item increases and I know the cross-price elasticity, how do I calculate sales of a item?

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