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- MicroEconomics Practice: Eric has a taco stand in downtown San Francisco. He wants to increase his total revenue. He knows that, when tacos are $1.00, he sells 20 an hour, and when he lowers the price to $0.75, he sells 25 an hour. (a) Calculate the price elasticity of demand for Jose's hotdogs using the midpoint formula. (show the formula and your calculations) (b) Is demand elastic or inelastic? How do you know? Explain your answer. (c) Using the price elasticity of demand calculated in section A, explain whether Eric should raise or lower the price to generate more revenue.Joy Lima manages a Sweet Chocolate Bar Store. She charges P100 per bar for her chocolate. You, the economist, have calculated the elasticity of demand for the chocolate in her town to be 2.5. a) If she wants to increase her total income or revenue, what advice will you give her and why? b) What economic principle apllies? Explain your answer.READ THEN ANSWER THE QUESTION : THE QUESTION : What is the degree of price elasticity of demand ofStarbucks? Why? In January 2020, Starbucks raised their beverage prices by an average of1% across the U.S, a move that represented the company’s firstsignificant price increase in 18 months. I failed to notice because the pricechange didn’t affect grande or venti (medium and large) brewed coffeesand I don’t mess with smaller sizes, but anyone who purchases tall size(small) brews saw as much as a 10 cent increase. The company’s thirdquarter revenue rose 25% to $417.8 million from $333.1 million a yearearlier, and green coffee prices have plummeted, so what gives?Starbucks claims the price increase is due to rising labor and non-coffeecommodity costs, but with the significantly lower coffee costs alreadyimproving their profit margins, it seems unlikely this justification is the truereason for the hike in prices. In addition, the price hike was applied to lessthan a third of their beverages…
- Suppose a college has an enrollment of !0,000 students and all the students live in dorms and have a cafeteria plan. Tuition is $20,000 and Room and Board is $10,000a. Suppose the price elasticity of demand is 2 and the school raises Tuition by 5%. Calculate the effect on Enrollment andb. Calculate the effect on the college’s revenue. Why is the effect on revenue ‘magnified”?c. Where did the college go wrong? What should it do?When Maha earned AED 17,000 per month, he used to spend 1,000 dirham a months in supermarket A. Now that he earns AED 28,000 per month, he spends 1200 dirham in supermarket A every month. A. Calculate income elasticity of demand B. What type of products do supermarket A sells according to your result in A? Explain.Question 1 Danny “Dimes” Donahue is a neighborhood’s 9-year-old entrepreneur. His most recent venture is selling homemade brownies that he bakes himself. At a price of $1.5 each, he sells 250. At a price of $1 each, he sells 300. Instructions: Use the midpoint method and round your answer to 2 decimal places. Do not include a minus sign. a. What is the elasticity of demand? Question 2 Linda sells 100 bottles of homemade ketchup for $10 each. The cost of the ingredients, the bottles, and the labels was $700. In addition, it took her 20 hours to make the ketchup and to do so she took time off from a job that paid her $20 per hour. Instructions: Enter your answers as whole numbers. Linda's accounting profit is: Linda's econmica profit is: Question 3 Gomez runs a small pottery firm. He hires one helper at $11,500 per year, pays annual rent of $7,000 for his shop, and spends $22,500 per year on materials. He has $40,000 of his own funds invested in equipment (pottery wheels, kilns, and…
- Economics Two drivers, Walt and Jessie, each drive up to agas station. Before looking at the price, each placesan order. Walt says, “I’d like 10 gallons of gas.”Jessie says, “I’d like $10 worth of gas.” What is eachdriver’s price elasticity of demand?The schedule below shows the quantities of nails demanded at each price: Price Quantity Old 400 10000 New 380 12000 a)Calculate the elasticities of demand, using the point method and interpret your result and List any four (4) factors that could result in the nails having the elasticity calculatedIn 2003, when music downloading first took off, Universal Music slashed the average price of a CD from $21 to $15. The company expected the price cut to boost the quantity of CDs sold by 30 percent, other things remaining the same. What was Universal Music’s estimate of the price elasticity of demand for CDs? If you were making the pricing decision at Universal Music, what would be your pricing decision? Explain your decision.Typed and correct answer please. I ll rate
- I need d,e,f solved 1. Suppose John, the owner-manager of a local hotel, projects the following demand for his rooms: Price ($) Quantity Purchased (per Night) Total Revenue 90 100 110 90 130 70 (a)Calculate the price elasticity of demand between $90 and $110. (Use the midpoint formula) (b)Is the price elasticity of demand between $90 and $110 elastic, unit elastic, or inelastic? (c)Will John’s total revenue rise if he increases the price from $90 to $110?…microeconomics Draw a demand curve for hotdogs. Label it D1. Draw a second demand curve for hotdogs that shows the effect of a rise in the price of a bottle of ketchup if the cross elasticity of demand for hotdogs with respect to the price of a bottle of ketchup is negative. Label it D2. X is Quantity (millions of hotdogs) Y is Price (dollars per hotdog) X increases from 2,4,6,8,10,12 Y increases from 1,2,3,4,Q.4 a) What can be said about the price elasticity of demand in each of the following statements? i) “The Tikka delivery business in this town is very competitive. I’d lose half my customers if I raised the price by as little as 10%.” ii) “My economics professor has chosen to use the Mankiw textbook for this class. I have no choice but to buy this book.” iii) “I always spend a total of exactly Rs.1000 per week on coffee.” b) A news website reported (Feb. 17, 2020) that ridership of Karachi Metro Bus declined after a fare increase: “There were nearly four million fewer riders in December 2019, the first full month after the price of a token increased Rs. 25 to Rs.150, than in the previous December, a 4.3 percent decline.” i) Use these data to estimate the price elasticity of demand for Karachi Metro Bus. ii) According to your estimate, what happens to the Karachi Metro Bus’s revenue when the fare rises? iii) Why might your estimate of the elasticity be unreliable?
