Q 2. (A) The monthly supply of desktop personal computers is given by the equation QS = 15,000 + 43.75P. At a price of $800, what is the price elasticity of supply? Q 2. (В) The British Automobile Company is introducing a brand new model called the "London Special." Using the latest forecasting techniques, BAC economists have developed the following demand function for the "London Special": Qp = 1,200,000 - 40P a) What is the point price elasticity of demand at prices of (a) $8,000 and (b) $10,000? b) Is it Elastic, Unit Elastic or Inelastic, Explain why?

Q 2. (A) The monthly supply of desktop personal computers is given by the equation QS = 15,000 + 43.75P. At a price of $800, what is the price elasticity of supply? Q 2. (В) The British Automobile Company is introducing a brand new model called the "London Special." Using the latest forecasting techniques, BAC economists have developed the following demand function for the "London Special": Qp = 1,200,000 - 40P a) What is the point price elasticity of demand at prices of (a) $8,000 and (b) $10,000? b) Is it Elastic, Unit Elastic or Inelastic, Explain why?

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter4A: Problems In Applying The Linear Regression Model

Section: Chapter Questions

Problem 3E

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(A) The monthly supply of desktop personal computers is given by the equation QS = 15,000 + 43.75P. At a price of $800, what is the price elasticity of supply? Q 2. (B) The British Automobile Company is introducing a brand new model called the "London Special." Using the latest forecasting techniques, BAC economists have developed the following demand function for the "London Special": QD = 1,200,000 - 40P a) What is the point price elasticity of demand at prices of (a) $8,000 and (b) $10,000? b) Is it Elastic, Unit Elastic or Inelastic, Explain why? (A) Phoenix Lumber Company uses the number of construction permits issued to help estimate demand (sales). The firm collected the following data on annual sales and number of construction permits issued in its market area: No. of Construction Sales Year Permits Issued (000) (1,000,000) 2003 6.50 10.30 2004 6.20 10.10 2005 6.60 10.50 2006 7.30 10.80 2007 7.80 11.20 2008 8.20 11.40 2009 8.30 11.30…
The monthly supply of desktop personal computers is given by the equation QS = 15,000 + 43.75P. At a price of $800, what is the price elasticity of supply? B) The British Automobile Company is introducing a brand new model called the "London Special." Using the latest forecasting techniques, BAC economists have developed the following demand function for the "London Special": QD = 1,200,000 - 40P
The British Automobile Company is introducing a brand new model called the "London Special." Using the latest forecasting techniques, BAC economists have developed the following demand function for the "London Special": QD = 1,200,000 - 40P a) What is the point price elasticity of demand at prices of (a) $8,000 and (b) $10,000? b) Is it Elastic, Unit Elastic or Inelastic, Explain why?
Harding Enterprises has developed a new product called the “Quest Simulator (QS)”. The market demand for this product is given as follows: Q = 240 - 4P. If QS is priced at $40, what is the point price elasticity of demand? Is demand elastic or inelastic? What is the maximum amount that consumers are willing to pay for the quantity demanded at the price of $40? (hint: it includes both the total expenditures and the consumer surplus) If the price of QS is increased slightly from $40, what will happen to the total expenditure on the product? What will happen to the consumer surplus? Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Using regression analysis on data from a field experiment, the demand curve for a product is estimated to be QXd = 1,200 − 3PX − 0.1PZ where Pz = $300. a. What is the own price elasticity of demand when Px = $140? Is demand elastic or inelastic at this price? b. What is the own price elasticity of demand when Px = $240? Is demand elastic or inelastic at this price? c. What is the cross-price elasticity of demand between good X and good Z when Px = $140?
What values should I plug in for the P, the QD, and the QS values in these equations for elasticity of demand and supply? The demand and supply equations are: QD=15-10P QS=40P-50
Enabling Assessment - Demand Estimation and Forecasting Given: The ATV Company produces a specialty cement used in the construction of roads. ATV is a price-setting firm and estimates the demand for its cement using a demand function in the linear form: Q = f (P, M, PR) where Qc = demand for cement/month (in yards) Pc = the price of cement per yard, M = country’s tax revenues per capita, and PR = the price of asphalt per yard. The manager of ATV obtained the following results in her attempt to estimate the demand for cement in the succeeding months. The results are presented below: DEPENDENT VARIABLE Qc R- SQUARE F-RATIO P-VALUE ON F OBSERVATIONS 64 0.8093 84.872 0.0001 VARIABLE PARAMETER ESTIMATE STANDARD ERROR T-RATIO P-VALUE INTERCEPT 8.20 4.01…
These questions require application of economic theory relating to elasticity of demand andsupply. All calculations must be shown in full. Answer ALL the questions.Q.3.1 A store that sells maize meal discovers that when the price of 1kg maize meal IsR24 per kilogram, the quantity demanded is 306 kgs per week. When the pricedecreases to R21 per kg, then the sales increase to 340 kgs per week. Use thisinformation to answer questions Q.3.1.1 and Q.3.1.2 below.Q.3.1.1 Determine the price elasticity of maize meal using the Arc method. (5)Q.3.1.2 Discuss the relationship between the price elasticity of maize mealand the total revenue the store received from the sales. Advise thestore on an appropriate pricing strategy.(7)Q.3.2 The store selling maize meal makes a further discovery, when the price of ricechanges from R30 per kg to R26 per kg, then the quantity of rice demandeddecreases from 1360 kg per month to 1238 kg per month. Use this informationto answer Q.3.2.1 and Q.3.2.2 below.Q.3.2.1…
For this question and the next few following, you should use the dataset below. Over the range from $4 to $6, Qd goes from 48 to 44. Using this range of prices and quantities, you should calculate the coefficient of price elasticity of demand. In the box labeled A1, the coefficient of price elasticity of demand is: 4 .22 2 .33
Given: The ATV Company produces a specialty cement used in the construction of roads. ATV is a price-setting firm and estimates the demand for its cement using a demand function in the linear form: Q = f( P, M, PR) where Qc = demand for cement/month (in yards) Pc = the price of cement per yard, M = country’s tax revenues per capita, and PR = the price of asphalt per yard. The manager of ATV obtained the following results in her attempt to estimate the demand for cement in the succeeding months. The results are presented below: DEPENDENT VARIABLE Qc R- SQUARE F-RATIO P-VALUE ON F OBSERVATIONS 64 0.8093 84.872 0.0001 VARIABLE PARAMETER ESTIMATE STANDARD ERROR T-RATIO P-VALUE INTERCEPT 8.20 4.01 2.04 0.0461 PC…
A single producer company surveyed the elasticity data of its product X. The results indicated that: - X has an income elasticity of +0.8 - The cross-elasticity of X with Y is equal to -0.7 - The price elasticity of X is |0.8| Given these results, the company estimated that the forecast increase in consumer income is 5% next year, the expected increase in the price of Y is 10%. If the company intends to increase its sales by 3% in the following year, what is your recommendation for an adjustment in the price of X? (Hint: Consider the increase in income, then the effect of Y on X and then calculate the price adjustment to be made)
Using regression analysis on data from a field experiment, the demand curve for a product is estimated to be QXd = 1,200 − 3PX − 0.1PZ where Pz = $300. What is the own price elasticity of demand when Px = $240? Is demand elastic or inelastic at this price? What would happen to the firm’s revenue if it decided to charge a price above $240? Enter your response rounded to one decimal place. Own price elasticity: Demand is: . If the firm prices above $240, revenue will: