3. According to the textbook, which of the following statements about drug interdiction is (are) correct? (x) Higher drug prices caused by drug interdiction policies may cause an increase in drug-related crime because drug addicts would have a greater need for quick cash. (y) Drug interdiction shifts the supply curve of drugs to the left, and, as a result, raises prices and total revenue in the drug market. (z) Advocates of drug interdiction argue that higher drug prices caused by such policies may discourage drug experimentation by young people. A. (x), (y) and (z) B. (x) and (y) only C. (x) and (z) only D. (y) and (z) only E. (y) only
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- 1. Online the timing and tailoring of prices to specific models of products is the key to successful pricing in online markets. And “Thanks to the ready availability of data in online markets, a pricing manager can easily approximate the elasticity of demands for the different products it sells online.” Assuming a 10 percent decrease in price increases sales by 28 percent, calculate the price elasticity of demand? If the wholesale price of the online product is $50 and sells at a price comparison site that charges $.50 per click and boasts a conversion rate of 5 percent (an average of 20 clicks are needed to generate a sale). What price should you charge for the product? What is the optimal markup on cost? 2. The authors assert that price sensitivity is affected by (1) product life cycles, and (2) numbers of competitors. In fact, “when the number of competing sellers doubles, a firm’s elasticity of demand is expected to double (and you should be able to verify this through…4. What do you think would be the effect on the equilibrium price and quantity of marijuana as a result of its consumption being legalized? Give reasons for your answer.Part 1: There is much discussion in the press about several states moving to legalizing marijuana, either for only medical purposes, or more extremely, for recreational purposes. Looking only at the economic impact (not moral implications) of such changes in the laws, discuss how the existing system of supply and demand for illegal marijuana will be changed with the new legalization. What will happen to existing supply avenues? Will legalization significantly change demand? How? Would one expect prices to change significantly? How? Part 2: What do you think most firms prefer, to have an elastic or inelastic demand for their products? Why would it be better to have an elastic/inelastic demand?
- why cannabis prices in Colorado declined sharply within four years, with reference to diagram.13. A possible explanation for a change in demand from D1 to D2 is (a) decrease in supply. (b) increase in supply. (c) improvement in technology. (d) increase in wages. (e) increase in the number of buyers. 14. A possible explanation for a change in supply from S1 to S2 is (a) an increase in consumer income. (b) a decrease in demand. (c) an increase in demand. (d) an increase in the cost of energy. (e) an increase in the number of sellers.ONLY ANSWER QUESTION #2 1. Online the timing and tailoring of prices to specific models of products is the key to successful pricing in online markets. And “Thanks to the ready availability of data in online markets, a pricing manager can easily approximate the elasticity of demands for the different products it sells online.”Assuming a 10 percent decrease in price increases sales by 28 percent, calculate the price elasticity of demand? If the wholesale price of the online product is $50 and sells at a price comparison site that charges $.50 per click and boasts a conversion rate of 5 percent (an average of 20 clicks are needed to generate a sale). What price should you charge for the product? What is the optimal markup on cost? 2. The authors assert that price sensitivity is affected by (1) product life cycles, and (2) numbers of competitors. In fact, “when the number of competing sellers doubles, a firm’s elasticity of demand is expected to double (and you should be able to verify…
- 1) If supply increases and demand also decreases, we can conclude that the new equilibrium: a. Quantity must increase but market price may fall, stay the same or even increase. b. Price must fall but market quantity may fall, stay the same or even increase. c. Price must increase but market quantity may fall, stay the same or even increase. d. Quantity must decrease but market price may fall, stay the same or even increase. e. Both market quantity and market price must increase. f. Market quantity must increase and market price must decrease. 2.) One of the following equations represents a supply curve and the other a demand curve. You have to decide which is which. Circle the answer for question three that is the closest to being correct. The equations are: Q = 150 - 10P Q = 100 + 5.6P What quantity will be demanded if the market price is forced to be $9? 3.2 60.0 111.0 118.0 130.0…1. Assume that if drugs (like marijuana, cocaine and heroin) were legalized, the supply curve would shift down and to the right because the business of drugs would become less risky and less expensive. a. Would you expect the demand curve to shift if drugs were legalized? Why or why not? b. Given the supply shift and your answer to (a), what would happen to the drug price and quantity consumed if legalized? Use a graph to illustrate your answer. c. Although it is difficult to empirically test, many people believe that thedemand for drugs is price inelastic for addicted users and price elastic foryoung or occasional, recreational users. Show graphically what wouldhappen to the total revenue of drug sellers whose customers are addicted and of sellers whose customers are casual users. Assume that drug sellers can be separated by their customer type. Also assume that the demand curve does not shift when drugs are legalized.Consider a market transaction that you have undertaken (or considering) as a consumer which was notable because it is particularly recent, large, or unusual. Analyze this transaction from a microeconomic standpoint: a. Explain how & why (from the perspective of the supplier), the good or service in question was created, and the reason you entered the market to secure this product or service (demand side). b. Discuss in general terms the factors on the demand and supply side that will have influenced the price you paid for this product. Show what might happen to the price of the product if one of these factors changes. c. Assess whether the product in question is likely to be price elastic or inelastic at the current market price (demand). Following this assessment describe the likely impact on the supplying company’srevenue following an increase in the price they charge (ceteris paribus) Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take…
- Graph the market for an illegal drug and explain the shape of each curve. List at least four ways the US govt. fights the “war on drugs” and identify each as either a supply-side or a demand-side strategy. On a new graph, illustrate a large decrease in supply and explain the result in terms of market P and Q. On a third graph, illustrate a small decrease in demand and explain the new result. Based on Parts 3 and 4, which strategies—supply or demand—are more effective in decreasing quantities of illegal drugs that are exchanged in these markets?Graph the market for an illegal drug and explain the shape of each curve. List at least four ways the US govt. fights the “war on drugs” and identify each as either a supply-side or a demand-side strategy. On a new graph, illustrate a large decrease in supply and explain the result in terms of market P and Q. On a third graph, illustrate a small decrease in demand and explain the new result. Based on Parts 3 and 4, which strategies—supply or demand—are more effective in decreasing quantities of illegal drugs that are exchanged in these markets? If you were the head of the US Congressional Finance Committee, how would you allocate funds among these strategies and why?This is the Problem exactly as my Instructor has posed it - please note that there is no price or QTY given, we are supposed to use hypothetical numbers and answer the questions from the "article" with just the information given. Senate and House Committees Set Sights on Big PharmaNew York Times, January 29, 2017Buckle up Big Pharma, it's going to be a bumpy ride in Congress this year. Senate and House Committee Chairs will gavel in the first of a series of hearings on soaring drug prices. “ Both chambers are expected to re-introduce bi-partisan legislation to stymie so-called pay-for-delay tactics drug-makers use to slow the introduction of generics. The proposed legislation is also expected to allow the importation of prescription drugs from approved Canadian pharmacies. (A) Below construct a market for name-brand prescription drugs as of 2017 labeling supply and demand with the subscript “17” and note the equilibrium price and quantity. Assume that the demand for prescription…