HOW DO YOU RESPOND TO PRICE ELASTICITY?People have unlimited needs and wants for their personal satisfaction and because of that the pricesof products easily get changed.Everyone is affected with the new normal in the market. The prices of products have become veryexpensive since the outbreak of the pandemic, not only in our locality, but in the whole world.If your income or the income of your family is not enough to purchase the basic commoditiesneeded by your family, what goods would you buy, instead?What economic or marketing strategies would you apply? How would you respond to the pricechanges of these commodities?

Economics as a subject is used to study and plan the allocation of scarce resources among humans…

Answered: HOW DO YOU RESPOND TO PRICE ELASTICITY?…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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if there is a decrease incomes of consumers,demand for head&shoulder shampoos will increase. True or False?
Take care of plagiarism. 1.A 10% increase in price that leads to a 12% decrease in the amount purchased indicates a price elasticity of more than 1 (in absolute value). True False 2. A 10% increase in price that leads to a 2% decrease in total expenditures (or total revenue) indicates a price elasticity of more than 1 (in absolute value). True False 3. If the percentage change in price is less than the resultant percentage change in quantity demanded, demand is__________ .(elastic/inelastic/unit elastic)
Demand is said to be price elastic if a 1 percent rise in price increases the quantity demanded by less than 1 percent. 1 percent rise in price increases the quantity demanded by more than 1 percent. 1 percent rise in price increases the quantity supplied by less than 1 percent. 1 percent rise in price reduces the quantity demanded by more than 1 percent. 1 percent rise in price reduces the quantity demanded by less than 1 percent.
Since the supply curve intersects the horizontal axis, all of the points along the supply curve shown are inelastic: True or false and Explain your choice Most likely, the elasticity of demand for transportation is greater than the elasticity of demand for cars. Revenue remains unchanged along a straight-line demand curve.
You find a new way to organise the business that reduces the cost of delivering a pizza. You believe this will enable the business the reduce the price of pizza from $12 to $10. It is estimated that the price elasticity of demand for pizza is -1.6. What will happen to total revenue if the price of pizza is decreased? What should you do?
If the percent rise in price is larger than the percent decline in quantity, then: the demand for your product could be either elastic or inelastic. the demand for your product is elastic. the demand for your product is inelastic. the demand for your product could be neither elastic nor inelastic.
An increase in quantity demanded is caused by an increase in the price of a substitute of the product. an increase in consumers' income. a decrease in the price of the product. a shift in tastes and preferences.
Suppose the price elasticity of demand for cigarettes is -0.7 and that the government can essentially set the price of cigarettes by altering the tax rate. If the government wishes to reduce the quantity of cigarettes demanded by 20 percent, how much must it raise the price of cigarettes? The government, to achieve its goal, must raise the price of cigarettes by percent. (Enter your response rounded to two decimal places)
How do you suppose the demographics of an agingpopulation of “Baby Boomers” in the United States willaffect the demand for milk? Justify your answer.
The government commissioned a research firm, Super Consulting, to conduct a study on the market demand for cigarettes in Malaysia. The firm reported that the price elasticity of demand for cigarettes is about 0.4. If a pack of cigarettes costs $2 and the government wants to reduce smoking by 20 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 after 1 year from now or 5 years from now? Explain Super Consulting also found that teenagers have higher price elasticity than adults. Why might this be true? Explain Outline and discuss the appropriate economic policies that can be implemented to reduce smoking.
You are the curator of a museum. It is running short of funds, so you decide to increase revenue. When should you raise the admission price in order to increase revenue? Always Only when demand is elastic Only when demand is inelastic
20 18 16 Price 14 12 10 ID: 8. 4 2 20 40 60 80 100 120 140 Quantity

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