Eco Assistance

1. For financial accounting purposes, what is the total amount of product costs incurred to make 10,000 units?

“The Cross-price elasticity of demand measures the rate of response of quantity demanded of one good, due to a price change of another good” (Economics.about.com,

For example, if the price of spaghetti sauce increases then the demand for the spaghetti noodles will decrease. If the price of spaghetti sauce decreases then the demand of spaghetti noodles will increase. Therefore, when the output of the cross price elasticity formula results in a negative coefficient means that the products are complementary goods.

If average income increases by 5% by what percentage and in what direction will the demand for Dunkin Donuts glazed doughnuts change? Are DD glazed doughnuts a normal good or an inferior good and how do you know?

14. When the price increases from $4 to $6 and the quantity demanded decreases by 2 units, the price elasticity of demand is

Discussion 1: Elasticity. Analyze the determinants of the price elasticity of demand and determine if each of the

Because the paint is at 2.56, this is considered to be elastic demand. This means that the demand for the good changes at a faster rate than the price change of the good. Sales fall off steeply when the price increases, but they jump sharply when the price declines.

The $320,000, on the other hand, is a fixed cost associated with the proposed addition.

II. When price falls from 4 pounds to 3 pounds the demand for travel increases to 80,000 units- At the original market price of 4 pounds the demand for travel was 60,000 units generating revenue of 240,000 pounds. When the price is reduced to 3 pounds the resulting demand is 80,000 units and this also generates income of 240,000 pounds. When market price changes and the resulting revenue remains the same it can be said that price elasticity of demand is unitary in

(E) What is the elasticity of demand when p = $25? If this price is decreased by 5%, what is the

5B. Economists use cross elasticity of demand to determine whether two products are substitutes or complements. The cross elasticity of demand measures how quantity demanded of one good (albums) responds to a change in the price for another good (live concert tickets). For example, between 1998 and 2008, sales of albums were down 45%, but over the same period, concert ticket sales revenues more than doubled to $4.2 billion, despite rising rises. During this same time period,

(a) Suppose the income elasticity of demand for pre-recorded music compact disks is +5 and the income elasticity of demand for a cabinet maker’s work is +0.5. Compare the impact on pre-recorded music compact disks and the cabinet maker’s work of a recession that reduces consumer incomes by 10 per cent. (2 marks)

Elasticity of demand represented as “Ed” is defined as a “measure of the response of a consumer to a change in price on the quantity demanded of a good” (McConnell, 2012). Determinants for elasticity of demand would include the substitutability of a good, proportion of a consumer 's income spent on a good, the nature of the necessity of a good and the time a purchase is under consideration by the consumer. Furthermore, elasticity of demand is calculated with this formula:

Recall that the elasticity of demand, which measures the responsiveness of demand to price, is given by

Elasticity of demand is shown when the demands for a service or goods vary according to the price. Cross-price elasticity is shown by a change in the demand for an item relative to the change in the price of another. For substitutes, when there is a price increase of an item, there is an increase in the demand for another item. When viewing complements, if there is an increase in the price of an item, the demand for another item decreases. Income elasticity is shown when there is a change in the demand for a good relative to a change in income. This concept is shown in how people will change their spending habits when their income levels change. For