Suppose that during the past year, the price of a virtual reality headset fell from $4,350 to $3,930. During the same time period, consumer sales increased from 386,000 to 487,000 headsets
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Suppose that during the past year, the price of a virtual reality headset fell from $4,350 to $3,930. During the same time period, consumer sales increased from 386,000 to 487,000 headsets
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- 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.” 1.Use these data to estimate the price elasticity of demand for milk. 2.According to your estimate, what happens to milk producers’ revenue when the price of milk rises? 3.Based on the information provided, why might your calculation of the elasticity be unreliableYou were promoted as the manager of a new Clean-Well Sanitary Store that sells cleaning and sanitation products wholesale. You recently read in an article that there the price of vitamins is expected to increase by 20 percent. How will this affect your store's sales of sanitation products? Selected Cross price elasticity Items Food supplements Medicines Foods 0.34 0.56 0.09 NO NEED TO GRAPH, JUST SHOW COMPUTATIONSAccording to economic theory, the demand x for a quantity in a free market decreases as the price p increases (see the figure). Suppose that the number x of DVD players people are willing dx (A) Find 9,000 to buy per week from a retail chain at a price of $p is given by x = 10 sp<70. 0.3p + 1' dx Answer parts (A), (B), and (C). dp 4500- (B) Find the demand and the instantaneous rate of change of demand with respect to price when the price is $30. Write a brief interpretation of these results. The demand is x = when the price is $30. 2250- 9,000 The instantaneous rate of change of demand with respect to price is when the price is X = 0.3p + 1 $30. Write a brief interpretation of these results. p. 0- 40 80 At a price level of $30, the demand is DVD players per week and demand is Price (dollars) V at the rate of (C) Use the results from part (B) to estimate the demand if the price is increased to $31. Demand .....
- (Figure: Graph) Refer to the graph to answer the question. Price S M P Quantity The movement from point S to point T is caused by an increase in the demand for the item. a decrease in the price of the item. an increase in the price of the item. a decrease in the demand for the item.Suppose the following table describes Anns’s weekly chocolate candies purchases, which vary depending on the price of a bags of candies: Price of chocolate candies ($) Bags of chocolate candies Chewing gum Apple pie cake Milk pack 2 4 3 2 3 2,5 2 3 4 2 Compute the cross price elasticity of chewing gum with respect to the price of a bag of chocolate candies. Compute the cross price elasticity of apple pie cake with respect to the price of a bag of chocolate candies. Compute the cross price elasticity of milk pack with respect to the price of a bag of chocolate candies. Are chocolate candies and chewing gum substitutes or complements? How do you know? Are of chocolate candies and apple pie substitutes or complements? How do you know? Are of chocolate candies and milk substitutes or complements? How do you know?The demand equation for a particular candy bar is px + x + 20p = 3000 where 1000x candy bars are demanded per week when p cents is the price per bar. If the current price of the candy is 49 cents per bar and the price per bar is increasing at the rate of 0.2 cent each week, find the rate of change in the demand.
- 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 priceQUESTION 7 To mark national burger day there is a nationwide 50% sale on burgers during May. A recent survey, of those who bought burgers at supermarkets and food trucks, found that 99% of people will only eat burgers in a bun. Which of the following statements are true: The decrease in the price of burgers during May will cause a decrease in the quantity demanded of burgers. The decrease in the price of burgers in May will cause an increase in both demand and quantity demanded for buns. The decrease in the price of burgers in May will only result in an increase in the quantity demanded for buns. Economic theory is unable to predict if there would be any shift in demand for buns with the discount on burgers in May.The demand equation for a particular candy bar is px + x + 20p = 3000 where 1000x candy bars are demanded per week when p cents is the price per bar. If the current price of the candy is 49 cents per bar and the price per bar is increasing at the rate of 0.2 cents each week, find the rate of change in the demand.
- Mr. Jones sells scrapbooking materials. He charges $20 per album and sells 120 albums month at this price. He plans to decrease the price to generate more sales. A survey indicated that for every $0.50 decrease in price, he can expect to sell 5 more albums. Write the expressions for the price of an album and the number of albums sold in one month Write an equation for the revenue using your expressions from part a. What price will generate the maximum revenue? What is the maximum revenue he can generate in one month?Viking InterWorks is one of many manufacturers that supplies memory products to original equipment manufacturers (OEMS) of desktop systems. The CEO recently read an article in a trade publication that reported the projected demand for desktop systems to be: addesktop = 1600 – 2Pdesktop + 0.6M (in millons of units), where Pdesktop is the price of a desktop system and M is consumer Income. The same article reported that the incomes of the desktop system's primary consumer demographic would increase 4.2 percent this year to $61,300 and that the selling price of a desktop would decrease to $980, both of which the CEO viewed favorably for Viking. In a related article, the CEO read that the upcoming year's projected demand for 32 GB desktop memory modules is: admemory = 1,200 - 100Pmemory - 2Pdesktop (n thousands of units), where Pmemory is the market price for a 32 GB memory module and Pdesktop is the selling price of a desktop system. The report also indicated that five new, small…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)