Given that a firm has a turnover of $8000. Suppose that Firm estimates that its Ey-coefficient = 2.4. Suppose economists predict that the level of consumer income will fall by 8% next month. Calculate the change in the quantity demanded (both in percentage and units) for next month, assuming that the Firm sold 8000 units this month.
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Given that a firm has a turnover of $8000.
Suppose that Firm estimates that its Ey-coefficient = 2.4. Suppose economists predict that the level of consumer income will fall by 8% next month. Calculate the change in the quantity demanded (both in percentage and units) for next month, assuming that the Firm sold 8000 units this month.
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- If a decrease in the price of movie tickets increases the total revenue of movie theaters, this is evidence that demand is a. price elastic. b. price inelastic. c. unit elastic with respect to price. d. perfectly inelastic.According to studies undertaken by the U.S. department of agriculture, the price elasticity of demand for cigarettes is about +0.5. Suppose a major brokerage firm advised its clients to buy cigarette stock under the assumption that, if consumer income rise by 50 percent as expected over the next decade, cigarette sales would double. Based on the fundamental economic principles on income elasticity of demand, a reasonable reaction to this investment advice would be?Daffy’s is a pet care company that recently increased the average price of its services by 5%. As a result, the number of customers dropped by 4%. Assume that the average disposable income in the area in which it operates decreased by 4% over the last year. As a result, the number of customers at Daffy’s decreased by 3%. Based on this information, what is the income elasticity of demand for services at Daffy’s? Are pet care services at Daffy’s considered normal goods?
- Suppose that the demand curve for a product is given by Qdx=100-2Px+aPy where Px = £20, where Py = £20 is the price of another product, and where a is 0. Calculate the demand for good X in this market at the current price level. How much revenue would the firm make? If the firm wishes to increase total revenue, would it need to increase or decrease the current price of good X? Calculate the cross-price point elasticity between goods X and Y at the current price level. Are the goods complements or substitutes?A company increases the price of its product from $ 210 to $ 240 per unit and keeps 30,500 units of this product in stock each month . Is elasticity elastic, inelastic, perfectly inelastic, or unitary? Why? Please indicate which could be an example of this product. Why?You are the manager of a firm that receives revenues of 50,000 AED per year from product X and 40,000 AED per year from product Y. The own price elasticity of demand for product X is −1.25 and the cross-price elasticity of demand between products Y and X is −1.5. How much will your firm’s total revenues (revenues from both products) change if you increase the price of good X by 2 percent?
- After a careful statistical analysis, the Chidester Company concludes the demand function for its product is Q = 500 - 3P + 2Pr + 0.1I where Q is the quantity demanded of its product, P is the price of its product, Pr is the price of its rival’s product, and I is per capita disposable income (in dollars). At present, P = $10, Pr = $20, and I = $6,000. What is the price elasticity of demand for the firm’s product? a. -0.0291 b. -0.027 c. -0541 d. -.270Consider the demand function for good1, Q1 = 2037 - 9P1 + 0.6000000000000001P2 - 0.75P3 + 0.07Y Where, price of good1 (P1) is 59, price of good2 (P2) is 255, price of good3 (P3) is 195, and income (Y) is 24425; (a) Find the price elasticity of demand (PED). (Give your answer to two decimal places) (b) Find the income elasticity of demand (YED). (Give your answer to two decimal places) c) Find the cross price elasticity of demand (XED) between good1 and good3. (Give your answer to east two decimal places) d) Estimate the percentage change in the demand for good1 resulting from a 4% decrease in the price of good2. (Give your answer to two decimal places, if required)If a manufacturer sets the price of the good at $ 10, he can sell 300 of this item in a year. If the producer raises the price of his good to $ 12, the sales amount remains at 240. i) What is the spring (arc) elasticity value of the demand for the product in question? ii) What is the point elasticity value of the demand for the good in question?
- MATH SOLVER Question Aura Healthy Drinks company private limited concludes that the demand function for its product X is: Qx = 1000 – 0.2 Px + 0.5 Py + 0.04 Y + 0.01 A Qx = Quantity demanded for its product X Px = Price of X Py = Price of Y (a substitute of product X) Y= Consumers income A= Advertisement expenditure of the firm At present price of the product X is Rs. 100. Price of its substitute product Y is Rs. 120. Consumers income is Rs. 10,000 and Advertisement expenditure of the Aura Healthy DrinksCompany Pvt. Ltd. Is Rs. 6000? Questions: 1. What is the current level of demand for the product of Aura Healthy DrinksCompany? 2. Calculate price elasticity for the firm’s product of X? 3. Calculate Advertising elasticity for the firm’s product X? 4. Calculate cross elasticity of demand between its product X and rival’s product Y? If the firm reduces price of X by 20 %, what will be the impact on its demand?Smooth Sailing, Inc., has estimated the demand function for its sailboats (quantity purchased annually) as follows: QD= 89,830-40PS+20Px+15Py+2I+0.001A+10W Where, QD = quantity purchased, PS = the price of smooth sailing sailboats, PX = the price of Company X’s sailboat, PY = the price of Company Y’s motorboat, I = per capita income in dollars, A = dollars spent on advertising, and W = number of favorable days of weather in the southern region of the United States. Suppose that PS = $9,000, PX = $9,500, PY = $10,000, I = $15,000, A = $170,000, and W = 160. Find the price elasticity of demand at that point. Is elastic, inelastic, or unitary elastic in part (a)? Justify?A store that sells maize meal discovers that when the price of 1kg maize meal is R24 per kilogram, the quantity demanded is 306 kgs per week. When the price decreases to R21 per kg, then the sales increase to 340kgs per week. Use this information to answer questions 3.1.1 and 3.1.2 below: 3.1.1. Determine the price elasticity of maize meal using the arc method (5) 3.1.2 Discuss the relationship between the price elasticity of maize meal and the total revenue the store received from the sales. Advise the store on an appropriate pricing strategy.