Besides its devastating health consequences, COVID-19 also caused significant economic hardships for many families around the world. For instance, https://www.cbpp.org/research/poverty-and- inequality/tracking-the-covid-19-recessions-effects-on-food-housing-and explores some of the trends in the United States. Assuming that incomes fell during the COVID recession for the customers of an inferior good, which of the following would we expect to happen to that good’s price and quantity during this time? a. Prices increase and quantities decrease b. Prices decrease and quantities decrease c. Prices increase and quantities increase d. Prices decrease and quantities increase

Besides its devastating health consequences, COVID-19 also caused significant economic hardships for many families around the world. For instance, https://www.cbpp.org/research/poverty-and- inequality/tracking-the-covid-19-recessions-effects-on-food-housing-and explores some of the trends in the United States. Assuming that incomes fell during the COVID recession for the customers of an inferior good, which of the following would we expect to happen to that good’s price and quantity during this time? a. Prices increase and quantities decrease b. Prices decrease and quantities decrease c. Prices increase and quantities increase d. Prices decrease and quantities increase

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter4: Estimating Demand

Section: Chapter Questions

Problem 6E

See similar textbooks

Similar questions

In a hypothetical situation, Government of Pakistan wants to put a curb on cigarette smoking through economic policy: Studies indicate that the price elasticity of demand for cigarettes is about 0.5. If a pack of cigarettes currently costs Rs.200 and the government wants to reduce smoking by 22 percent, by how much should it increase the price? If the government permanently increases the price of cigarettes, will the policy have a larger effect on smoking one year from now or five years from now? Studies also find that teenagers have a higher price elasticity of demand than adults. Why might this be true?
Hula Products has reintroduced the hula hoop to the world and faces a growing demand for its product in two distinct markets: the United States and Europe. Demand in these markets is: PU = 20 - .1QU and PE = 10 - .05QE., where all quantities are expressed in thousands of units (i.e. QU = 50 means 50 thousand units). Hula can produce hoops at no cost. The maximum Hula can produce is 80 thousand hoops. How many should be sent to Europe (QE)? Enter as a value (answer should be between zero and 80).
Suppose the makers of PEZ candies have decided to test market a new dispenser with red, white, and blue candies. The PREZ dispenser (as it will be called in 2024) bearing the likeness of each political party's presidential candy-date is estimated to have a market demand given by: 5Q = 3000 - 200p where p is expressed in dollars per dispenser and Q is expressed in thousands of dispensers sold per week. a. If p= $6 per PREZ dispenser, how many PREZ dispensers will be sold that week? Less than a thousand? b. If p = $6 per PREZ dispenser, what will be the price elasticity of demand? PLEZ show your work. c. If the objective is to maximize revenue, how much would you recommend the company charge per PREZ dispenser?
According to the article, after the city of Berkeley imposed a $0.01 per ounce tax on sugar-sweetened beverages (SSBs), by what percent did consumption of SSBs fall among Berkeley's low-income residents? Who was Berkeley's tax levied on in city law? Buyers or sellers? Assume that the price elasticity of supply for SSBs is elastic and the price elasticity of demand for SSBs is inelastic. What would be the outcome of the sales tax on sugary drinks if the law says that the tax is levied on sellers of the drinks? Who will pay the tax? Assume that the price elasticity of supply for SSBs is elastic and the price elasticity of demand for SSBs is inelastic. What would be the outcome of the sales tax on sugary drinks if the law says that the tax is levied on buyers of the drinks? Who will pay the tax? Explain why your answers to #3 and #4 are different or similar. What determines who pays the tax? What is your opinion of a tax on sugary drinks in your community? Would you be in favor or…
In a study, by economist Paul Gertler and Jacques van der Gaag, it was found that the price elasticity of demand for hospital services in Peru was 0.67 among poor households and 0.29 among wealthy households. What will be the impact on poor and wealthy households of a government decision to increase the price of hospital services by 10%.
The short-run demand and supply elasticities for crude oil are -0.076 and 0.088, respectively. The current price per barrel is $30 and the short-run equilibrium quantity is 23.84 million barrels per year. What will be the effects on the market price and quantity if the government decides to purchase (and store away) an additional 2 million barrels of oil? Assume that the additional consumption of oil by the government results in a parallel shift of the supply curve to the left by 2 million barrels per day What could be the economic rationale for buying and storing oil?
The following estimates have been obtained for the market demand for cereal In Q= 9.01- 0.68 In P+0.75In A-1.3M, where Q is the quantity of cereal,P is the price of cereal,A is the level of adverstising, and M is income. Based on this information,determine the effect on the consumption of cereal of : a: A 5 percent reduction in the price of cereal. b: A 4 percent increase in income. c: A 20 percent reduction in cereal advertising.
Suppose that the makers of PEZ candies have decided to test market a new dispenser with red, white, and blue candies. The PREZ dispenser (as it will be called in 2024) bearing the likeness of the leading presidential candy-dates is estimated to have a market demand given by: 750 Q = 48000 - 6000 p where p is expressed in dollars per dispenser and Q is expressed in thousands of dispensers sold. a. Ifp is equal to 5 dollars per dispenser, how many PREZ dispensers will be demanded at that price? {Hint: Recall that Q is expressed in thousands.} b. Ifp is equal to 5 dollars per dispenser, what will be the price elasticity of demand for PREZ dispensers? PLEZ show your work. c. If the price rises from $5 to $5.50, will total revenue rise or fall? And by how much? Please express your answer in dollars, not thousands of dollars. d. If the objective is to maximize revenue, how much would you recommend the company charge per PREZ dispenser?
An analyst for a major apparel company estimates that the demand for its raincoats is given by ln Qdx = 10 − 1.2 ln Px + 3 ln R − 2 ln Ay where R denotes the daily amount of rainfall and Ay represents the level of advertising on good Y. What would be the impact on demand of a 10 percent increase in the daily amount of rainfall? What would be the impact of a 10 percent reduction in the amount of advertising directed toward good Y? Can you think of a good that might be good Y in this example?
The market for coffee is characterized by Qdc=210-Pc and Qsc=2Pc-0.5Pt where QC is the quantity of coffee in hundreds of pounds, PC is the price per hundred pounds of coffee, and PT is the price per hundred pounds of tea. The market for tea is characterized by Qdt=210-Pt and Qst= 2Pt-0.5Pc, where QT is the quantity of tea in hundreds of pounds. Suppose a new medical study touts the benefits of drinking coffee, leading to an increase of 30 pounds of coffee at every price. The new equilibrium price of tea is ____. The new equilibrium price of coffee is _____.
Using the supply and demand framework, predict the impact on the equilibrium quantity of cars if consumer incomes decrease. Group of answer choices -Not enough information -Quantity stays the same -Quantity Decreases -Quantity Increases
A conservative critic of government programs has written Governments know A conservative critic of government programs has written, “Governments know how to do one thing well. They know how to create shortages and surpluses.” Explain this quotation using examples like the minimum wage or interest-rate ceilings. Show graphically that if the demand for unskilled workers is price-elastic, a minimum wage will decrease the total earnings (wage times quantity demanded of labor) of unskilled workers. A conservative critic of government programs has written Governments know