"The Travel-King" is a small travel agency operating out of Copenhagen selling weekend skiing trips to Sweden. It is charging DKK 4.000 for a trip. It rents the busses including the driver in the period January to March. Besides the winter season there is no activity in the firm. It estimates the price elasticity to be (minus) 2. It had the following Profit & Losses (P&L) for 2017: Revenue: 4.000.000 Salaries: 2.000.000 Bus rental: 1.000.000 Hotels etc.: 1.000.000 Profit: 0

"The Travel-King" is a small travel agency operating out of Copenhagen selling weekend skiing trips to Sweden. It is charging DKK 4.000 for a trip. It rents the busses including the driver in the period January to March. Besides the winter season there is no activity in the firm. It estimates the price elasticity to be (minus) 2. It had the following Profit & Losses (P&L) for 2017: Revenue: 4.000.000 Salaries: 2.000.000 Bus rental: 1.000.000 Hotels etc.: 1.000.000 Profit: 0

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Consider the demand for ground beef. If the price of a substitute good (for example, turkey) decreases and the price of a complement good (for example, taco seasoning) decreases , can you tell for sure what will happen to the demand for ground beef? Why or why not? Illustrate your answer with a graph. Question 3 options:
What is the Law of Diminishing Demand? Provide one example.
If the price of Pepsi were to increase then which of the following would happen? the demand for Coke (a substitute) would increase the demand for Pepsi would increase O the demand for Coke (a substitute) would decrease O the demand for Pepsi would decrease
When the price of goods X increases by 20% and the quantity of demand decreases by 30%, the demand for the goods is inelasticTrue or false?
How will the elasticity of demand be affected in the following cases? A. More substitutes become available. B. The income elasticity decreases.
What is the "quantity demanded"? A) the maximum amount of a good that can be consumed during a specific time period B) the amount of a good people are able and willing to buy during a specific time period and at a given price C) the amount of a good people desire D) the amount of a good people are able and willing to buy at all possible prices
When the price of a good increased by 2%, the quantity demanded of it decrease 10% does this have close substitutes or poor substitutes? Is this good more likely to be a necessity or a luxury, and to be nearly or broadly defined
Demand for Martha’s Mums will be 650 small mum plants if they are priced at $4.25 each but only 150 if they are priced at $10.75 each. a. Find the linear demand equation for Martha’s small mums (let x = number of small mum plants supplied, y = price). b. At what price will the demand for Martha’s mums drop to zero? c. What will be the demand for Martha’s mums if they are free? (Round to the nearest whole number).
Please, show how to compute a slope of linear demand function?
Assume that the income elasticity of demand for hot dogs is - 1.25 and that the income elasticity of demand for lobster is 1.25. What will happen to each good's demand curve as income goes up?
Pick a good whose demand is price elastic. Let's find substitutes and five compliments. Which is easy to come up with the list of substitutes or the list of compliments? Explain.
If income elasticity of demand of good X is 0.89, what will happen to equilibrium price if there is an increase in income of consumers? Draw a diagram to support your answer.