Consider two scenarios.Scenario 1: Assume the firm increased price of their Pepsi fizzy drink by 25% over 2022-2023.Scenario 2: Assume the firm increased price of their Pepsi fizzy drink by 5% in first quarter of 2024. For each scenario, do the following:▪ Draw a single straight-line demand curve and explain the relevant details on the price elasticity of demand (PED).▪ Show the workings of your calculation of PED.▪ Describe and quantify what would happen to revenue in this case.▪ In your answer, use hypothetical incremental values (rough guesses from your imagination) for the prices on the y-axis and quantities on the x-axis.
Consider two scenarios.Scenario 1: Assume the firm increased price of their Pepsi fizzy drink by 25% over 2022-2023.Scenario 2: Assume the firm increased price of their Pepsi fizzy drink by 5% in first quarter of 2024. For each scenario, do the following:▪ Draw a single straight-line demand curve and explain the relevant details on the price elasticity of demand (PED).▪ Show the workings of your calculation of PED.▪ Describe and quantify what would happen to revenue in this case.▪ In your answer, use hypothetical incremental values (rough guesses from your imagination) for the prices on the y-axis and quantities on the x-axis.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Consider two scenarios.
Scenario 1: Assume the firm increased
Scenario 2: Assume the firm increased price of their Pepsi fizzy drink by 5% in first quarter of 2024.
For each scenario, do the following:
▪ Draw a single straight-line demand curve and explain the relevant details on the
(
▪ Show the workings of your calculation of PED.
▪ Describe and quantify what would happen to revenue in this case.
▪ In your answer, use hypothetical incremental values (rough guesses from your imagination) for the prices
on the y-axis and quantities on the x-axis.
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