se Scenario 1. People are becoming more aware about their health and believe that ice cream is very unhealthy to them 2. The price of Nike sports shoes increases 3. The technique for producing mobile phones is improving which causes a price reduction 4. The price for DVD players is decreasing. How will this affect the market for VCD players? 5. Due to keen competition among the internet service providers/NOW.com has exempted the installation fees for consumers 6. Summer comes early this year. What will happen to the air conditioner market?

se Scenario 1. People are becoming more aware about their health and believe that ice cream is very unhealthy to them 2. The price of Nike sports shoes increases 3. The technique for producing mobile phones is improving which causes a price reduction 4. The price for DVD players is decreasing. How will this affect the market for VCD players? 5. Due to keen competition among the internet service providers/NOW.com has exempted the installation fees for consumers 6. Summer comes early this year. What will happen to the air conditioner market?

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter6: Simple Pricing

Section: Chapter Questions

Problem 6.1IP

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Genovia has experienced exceptional growth in recent years. Its GDP per capita (orIncome) has increased from around $30,000 to $50,000 in last 5 years. Over theperiod quantity demanded of personal cars has increased from 450,000 units per yearto 600,000 units. Quantity demanded of public transport, however, has declined from10,000 buses to 7,000 buses. Calculate income elasticity of demand and tell whichproduct is a normal good and which one is inferior.
In Class, 10–25 Minutes for Teams For each of thefollowing products, determine at least three differentprices that might be charged. Then survey each of theindividuals within your group to find out how much ofeach product they would buy at each price point foreach of the products. For each product, calculate theprice elasticity of demand to determine whether thedemand is elastic or inelastic.a. Cheese pizzas per monthb. Movie tickets per monthc. Concert tickets per year
Creative Homework/Short Project Assume that you arean entrepreneur who runs a bakery that sells glutenfree breads and cakes. You believe that the currenteconomic conditions merit an increase in the price ofyour baked goods. You are concerned, however, thatincreasing the price might not be profitable becauseyou are unsure of the price elasticity of demand for yourproducts. Develop a plan for the measurement of priceelasticity of demand for your products. What findingswould lead you to increase the price? What findingswould cause you to rethink the decision to increaseprices? Develop a presentation for your class outlining(1) the concept of elasticity of demand, (2) why raisingprices without understanding the elasticity would bea bad move, (3) your recommendations for measurement, and (4) the potential impact on profits for elasticand inelastic demand
Creative Homework/Short Project Assume that you arean entrepreneur who runs a bakery that sells glutenfree breads and cakes. You believe that the currenteconomic conditions merit an increase in the price ofyour baked goods. You are concerned. however, thatincreasing the price might not be profitable becauseyou are unsure of the price elasticity of demand for yourproducts. Develop a plan for the measurement of priceelasticity of demand for your products. What findingswould lead you to increase the price? What findingswould cause you to rethink the decision to increaseprices? Develop a presentation for your class outlining(I) the concept of elasticity of demand, (2) why raisingprices without undetstanding the elasticity would bea bad move. (3) your recommendations for measurement. and (4) the potential impact on profits for elasticand inelastic demand
You have data on Meena's quantity demanded for craft beer and theirincome. According to this data when Meena's income falls by 7% theassociated change in their quantity demanded for beer is 11%. You don'tknow if it is an increase or decrease in quantity demanded. From pastresearch you know that craft beer is a normal good for Meena. Use thisinformation to calculate Meena's income elasticity of demand.
Which of these products would demonstrate the most elasticity in a middle-income household? a. Fruit juice b. Toothpaste c. A dining room table d. A newspaper e. Brown bread
point a,b,c,d,e in total revenue, which points will decrease and which will be infinty. TABLE 5-3 Ano change Point D. E Elasticity 1.25 0.3 1.0 0.2 2.1 Refer to Table 5-3. At what points would a priceincrease be accompanied by anincreasein total revenue? Ed
opbox Format Tools Add-ons Help Last edit was seconds ago BIUA 三三三三 1三ニ Normal text Calibri 11 1. 3 4 6 I 7r Demand Shifters: 5-14 The Demand for Beef. For each scenario draw a general demand curve and label it D. Then shift the curve to the left or the right depending on what will happen to the demand for beef. Draw an arrow showing direction and label your new curve D1. Then tell me the determinant of demand that shifted the curve. For example, consumer income increases or population decreases. Hint: There is one that is a change in quantity demanded and the curve will not shift, there will just be movement along the curve. 5. Millions of immigrants swell to U.S. population 6. Pork prices drop 7. Surgeon general warns that eating beef can be hazardous to health prd 8. Take home pay for Americans drops 3 month in a row 2.
6. Elasticity and total revenue The following graph shows the daily demand curve for bikes in Denver. Use the green rectangle (triangle symbols) to compute total revenue at various prices along the demand curve. Note: You will not be graded on any changes made to this graph. 2 Total Revenue PRICE (Dollars per bike) 88NR S 89 88 89 O 300 275 18 27 35 45 54 53 72 QUANTITY (Bikes) 91 Demand 90 99 108
What is a consumers wishedfor level of performances?
Fl in the missing amounts in the following table (Round your responses to one decimal place and include a minus aign f necessary. De not inolude a pl gn for positve numbers) Change in Price % Change in Quantity Elasticity Demand for the Apple Wanch -25% -1.0 Demand for roses on Valentine's Day +50% -02 Demand for electronio cigarettes 10%
If the price of a product decreases by 10 percent and the quantity demanded increases by 5 percent, then O the producer should lower the price further to sell more and further increase total revenue. the producer should raisc the price, but not as high as it was, to increase total revenue. O the produucer should raise the price higher than where it was to experience higher total revenue. O the producer should change the price back to where it was before the change.