Suppose that during the past year , the price of a laptop computer fell from $2,100 to $1,820. During the same time period , consumer sales increased from 429,000 to 530,000 laptops
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Suppose that during the past year , the
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- Rising peanut prices have forced peanut butter makers to raise the price of peanut butter from $2 to $3 per jar, causing quantity demanded to fall. In addition, sales of jelly also dropped by 15%. Soon thereafter, makers of chocolate spread dropped its price from $4 to $3 per jar. This resulted in a further decline in peanut butter sales by 20%. What is the cross elasticity of demand between peanut butter and jelly (use the midpoint method)? Are these two products complements or substitutes?Ypsilanti Market Research conducted a survey to find out whether people who earn more money purchase more expensive goods. The following graph indicates the relationship between income the survey subjects earned and the price of the home that they purchased. PRICE (Thousands of dollars per home) 500 450 400 350 300 250 200 150 100 50 L 0 10 20 30 40 50 60 70 80 INCOME (Thousands of dollars per year) 90 100According to the U.S. Department of Energy, the average price of gasoline in the U.S. fell by 14% in 2015. The number of hybrid electric vehicles (HEV) sold in the U.S. fell by 36% in the same year. Calculate the cross-price elasticity of demand for HEVs and gasoline. Round answer to one place after the decimal.
- The Globe and Mail (December 16, 1997) reported that milk consumption declined following price increases: “Since the early 1980s, the price of milk in Canada has increased 22 per cent. As prices rose, the demand for milk fell off. Total [consumption] of milk on a per capita basis dropped . . . to 2.62 hectolitres in 1995 from 2.92 hectolitres in 1986.” Use these data to estimate the price elasticity of demand for milk. (1.5marks) 0.49 milk is inelastic According to your estimate, what happens to milk producers’ revenue when the price of milk rises? (1 mark) When the price of milk rises milk producers revenue drop because the demand for milk dropped Why might your estimate of the elasticity be unreliable? (Hint: Notice that The Globe and Mail is careless about the distinction between demand and quantity demanded.) (1 mark)Suppose that during the past year, the price of a laptop computer fell from $2,950 to $2,450. During the same time period, consumer sales increased from 430,000 to 619,000 laptops. Calculate the price elasticity of demand between these two price–quantity combinations by using the following steps. After each step, complete the relevant part of the table with the appropriate answers. (Note: For decreases in price or quantity, enter values in the Change column with a minus sign.) Original New Average Change Percentage Change Quantity Price Step 1: Fill in the appropriate values for original quantity, new quantity, original price, and new price. Step 2: Calculate the average quantity by adding the original quantity and the new quantity and then dividing by 2. Do the same for the average price. Step 3: Calculate the change in quantity by subtracting the original quantity from the new quantity. Do…Suppose that you observe that when the price of cigarettes rises by 10%, the quantity of cigarettes purchased falls by 8.7%. This implies that cigarettes are price in demand and that the price elasticity of demand is equal to elastic; 1.15 inelastic; 1.15 inelastic; 0.87 O elastic; 0.87
- Suppose that Super Market increased the price of a dozen free - range eggs from $5.50 to $6.50. As a result, it found that the daily quantity sold fell from 42 to 38 dozen.ЕОC 6.03 A 45% fall in the price of computers leads to a 20% rise in the amount of computers purchased by customers. Using this information, we would expect total revenue to when prices drop. Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. decrease increase not change d increase or decrease (not enough information)The bar graph below shows the percentages of income spent on food (i.e., the portion of a consumer's budget devoted to food spending) and the elasticities of demand (in absolute value) for several countries' residents. [Click on the bar graph to open a PDF viewable version in another tab.] Malawians Haitians Bangladeshis Indians Brazilians Koreans. Greeks Italians Australians French Canadians Americans Percentage of Income spent on Food 17% 15% 14% 12% W 31% 28% 35% 40% X 56% Elasticity of Demad 66% 81% 75% According to the bar graph, which of the answer choices is correct? Malawians spend less money on food than Australians. French spend less money on food than Brazilians. Bangladeshis spend a larger percentage of their income on food than Americans. O Canadians spend a larger percentage of their income on food than Koreans
- When the price of a certain product was considered to be "low", consumers spent $5 million monthly on it. After the price doubled, the total consumer expenditures increased to $7 million. Recently you read that this means that the demand curve for this product is upward sloping. Do you agree? Explain.A gas station owner sees a report on TV which states that the number of gallons of gasoline sold in the U.S. has barely dropped, even as the price per gallon has soared in recent weeks. The price elasticity of demand for gasoline is described in the report as “highly inelastic”. The gas station owner responds to this report by jacking up the prices at his station by 50 cents per gallon. Sales and revenues at his station plummet in the first month after the price increase, and drop even further in the second month. What factors did this gas station owner fail to consider when he responded to the TV report by aggressively raising his prices?samsung reported a staggering 20 percent drop in sales of it's flagship smartphone,the Galaxy S5, for the last three months. Profits declined even more - a 49 percent collapse from last year. The reason for this collapse: Apple's introduction of it's large- screen Iphone 6 and price cuts on the IPhone 5. Apple dropped the price of the 16GB IPhone 5s from $199 to $99 and the 8GB IPhone 5s from $99 to a cool $0, with contract. By changing the denominator in each case, compute the percentage change in the 16GB IPhone 5s price, as computed from (a) The initial price (b) The final price (c) The average price