ECN104 QUIZ 1 PART 4

Question 1 Think about the market for chocolate bars. Market research has revealed the demand and supply equations as follows: QD 1600- 200P Qs = 100+ 100P Where, P is the price in £ (UK pounds), QD and Qs are quantity demanded and supplied for the product, respectively. C) Compute the price elasticity of demand between the price of £3 and £4. Use the mid-point (arc) method (use 2 decimal places). D) If the market price is now at £3, should a chocolate bar firm increase its price to increase its total revenue? Explain why or why not. E) Give an example of an event that will shift the supply curve for the chocolate bars left. Explain the process of market adjustments after the shift in words and in a graph.

Q5. What do you mean by the demand of a commodity? a) Desire for the commodity b) Need for the commodity c) Quantity demanded of that commodity d) Quantity that consumers are able and willing to buy at various prices c particular period of time

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 unreliable

Exhibit 8- Suppose that in a recent market period, the following relationship existed between the price of tablet devices and the quantity supplied and quantity demanded.   Price                            Quantity Demanded                              Quantity Supplied $330                             100 million                                           40 million $340                             90 million                                             60 million $350                             80 million                                             80 million $360                             70 million                                             100 million $370                             60 million                                             120 million Suppose that in a later market period, the quantities supplied in the Exhibit 8 are unchanged. The amount demanded, however, has increased by 30 million at each price. Is this an increase or a decrease in demand? What is the new…

According 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 .....

Q21

Question 25 pts Comparing demand curve A to demand curve B we can say that Comparing demand curve A to 100% demand curve B between $9 and $15 prices, we can say that Between the price of $3 and $9, the price elasticity of demand for curve A is If demand curve A and B were different products (A and B), which of the following might explain their differences? Which of the following is true about demand curve A and B ? Question 2 $24 Quantity Demand for A and B $21 B $18 A $15 $12 $9 $6 $3 $0 0 2 4 6 8 10 12 14 5 pts Comparing demand curve A to demand curve B we can say that [Select] Comparing demand curve A to demand curve B between $9 and $15 prices, we can say that [Select] Between the price of $3 and $9, the price elasticity of demand for curve A is [Select] If demand curve A and B were different products (A and B), which of the following might explain their differences? [Select] Which of the following is true about demand curve A and B? [Select]

Q1) Price elasticity of demand is an essential tool to measure the responsiveness of quantity demanded as the result of changes in the price of the product.  Explain that in detail, you need to use drawing to express your answer.

Q8- Suppose the quantity demanded weekly of the Super Titan radical tires is related to its unit price by equation p+x^2=241, where p is measured in dollars and x is measured in units of a thousand. How fast is the quantity demanded changing when x= 13, p= 72, and the price/tire is increasing at the rate of $7/ week? Round the answer to the nearest integer. Dropping at the rate of _______ tires/wk

. From the following data calculate price elasticity of demand: Price () Total Expenditure (?) 6. 100 9. 150

Explain the following demand determinants: (1) Income (2) Price of related goods and services (3) Taste or preferences of consumers (4) Size of Population (5) Expected Price of the Product in the future periods

1. Economic profit is defined as the difference between revenue and ____. explicit cost total economic cost implicit cost shareholder wealth 2. In the shareholder wealth maximization model, the value of a firm&#39;s stock is equal to the present value of all expected future ____ discounted at the stockholders&#39; required rate of return. Profits (cash flows) Revenues Outlays Costs Investments  3. The Saturn Corporation (once a division of GM) was permanently closed in 2009.  What went wrong with Saturn? Saturn&#39;s cars sold at prices higher than rivals Honda or Toyota, so they could not sell many cars. Saturn sold cars below the prices of Honda or Toyota, earning a low 3% rate of return. Saturn found that young buyers of Saturn automobiles were very loyal to Saturn and GM. Saturn implemented a change management view that helped make first time Saturn purchasers trade up to Buick or Cadillac. 4. The flat-screen plasma TVs are selling extremely…

Increase in the demand for yellow corn Increase in the demand for vapor heat treatment services for tropical fruits Increase in the demand for food delivery services