Part 1 - 10 Marks Demand for Pepsi Consider the price-setting power of firms in a unique time in history,post-pandemic amidst an outbreak of high inflation (2022 to mid-2023), followed by a steady periodof relatively moderate inflation in recent months. We shall focus on the beverage giant, PepsiCo. To giveyou some relevant knowledge and guidance for this task, read the following freely available articles:https://www.fastcompany.com/90902098/how-long-can-companies-raise-prices-inflation-pepsihttps://www.crikey.com.au/2024/02/12/mcdonalds-pepsi-price-gouging-inflation-cost-of-living/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 firstquarter of 2024. For each scenario, do the following: ▪ Draw a single straight-line demand curve andexplain the relevant details on the price elasticity of demand (PED). ■ Show the workings of yourcalculation 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-axisand quantities on the x-axis.0,0000,0000,0000,0000North AmericaEuropeLatin AmericaAsia PacificMiddle East & AfricaData source: statista Part 1 - 10 Marks Demand for Pepsi Consider the price-setting power of firms in a unique time in history,post-pandemic amidst an outbreak of high inflation (2022 to mid-2023), followed by a steady periodof relatively moderate inflation in recent months. We shall focus on the beverage giant, PepsiCo. To giveyou some relevant knowledge and guidance for this task, read the following freely available articles:https://www.fastcompany.com/90902098/how-long-can-companies-raise-prices-inflation-pepsihttps://www.crikey.com.au/2024/02/12/mcdonalds-pepsi-price-gouging-inflation-cost-of-living/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 firstquarter of 2024. For each scenario, do the following: ▪ Draw a single straight-line demand curve andexplain the relevant details on the price elasticity of demand (PED). ■ Show the workings of yourcalculation 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-axisand quantities on the x-axis.0,0000,0000,0000,0000North AmericaEuropeLatin AmericaAsia PacificMiddle East & AfricaData source: statista

The objective of the question is to understand the impact of price changes on the demand for Pepsi…

Part 1 - 10 Marks Demand for Pepsi Consider the price-setting power of firms in a unique time in history, post-pandemic amidst an outbreak of high inflation (2022 to mid-2023), followed by a steady period of relatively moderate inflation in recent months. We shall focus on the beverage giant, PepsiCo. To give you some relevant knowledge and guidance for this task, read the following freely available articles: https://www.fastcompany.com/90902098/how-long-can-companies-raise-prices-inflation-pepsi https://www.crikey.com.au/2024/02/12/mcdonalds-pepsi-price-gouging-inflation-cost-of-living/ 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. 0,000 0,000 0,000 0,000 0 North America Europe Latin America Asia Pacific Middle East & Africa Data source: statista

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

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Part 1 - 10 Marks Demand for Pepsi Consider the price-setting power of firms in a unique time in history, post-pandemic amidst an outbreak of high inflation (2022 to mid-2023), followed by a steady period of relatively moderate inflation in recent months. We shall focus on the beverage giant, PepsiCo. To give you some relevant knowledge and guidance for this task, read the following freely available articles: https://www.fastcompany.com/90902098/how-long-can-companies-raise-prices-inflation-pepsi https://www.crikey.com.au/2024/02/12/mcdonalds-pepsi-price-gouging-inflation-cost-of-living/ 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. 0,000 0,000 0,000 0,000 0 North America Europe Latin America Asia Pacific Middle East & Africa Data source: statista

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