QUESTION 3 When firm A increased its prices from $27 to $41, its sales fell from 4,789 units to 4,481 units. Assuming that the firm faces a linear demand curve, what is the firm's demand curve?
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- 1) Determine the Market Equilibrium of a product if it is known that the Demand function Qd: 180 -2P, and the Supply function: Qs = -40 + 30P . Draw the curve. 2) Given Pd = 50 – 6Q and Ps = 8 + 8Q , determine P and Q at the point BEP, draw the curve.Express the market demand curve in equation form. Interpret the slope and the intercept of the market demand Compute the point elasticity of market demand for Krispy Kreme as price increases from PhP 20 to PhP Compute the point elasticity of market demand for Krispy Kreme as price decreases from PhP 40 to PhPNo written by hand solution Suppose that the market for video games is competitive with demand function Qd = 170 – 4p + 2Y + 3pm – 2pc, where Qd is the quantity demanded, p is the market price, Y is the monthly budget that an average consumer has available for entertainment, pm is the average price of a movie, and pc is the price of a controller that is required to play these games. Given that Y = $100, pm = $30 and pc = $30, use Excel to calculate quantity demanded for p = $10 to p = $80 in $5 increments. Using Excel’s spreadsheet Find Qd = ________ when P=$30. Find Qd = ________ when P=$45. Now, Y increases to $120. Re-calculate the demand schedule and find Qd = ________ when P=$20. Let Y = $100 again, but pm increases to $40. Re-calculate the demand schedule and find Qd = ________ when P=$25. Let Y = $100, pm = $30, and pc increases to $40. Re-calculate the demand schedule and find Qd = ________ when P=$50.
- You are the manager of a firm that receive revenue of Rs.30,000 per year from product X and Rs. 70,000 per year from product Y. The own price elasticity of demand for product X is -2.5 and the cross price elasticity of demand between product Y and X is 1.1. How much will you firm’s total revenue (revenues from both products) change if you increase the price of good X by 1 present?Express the market demand curve in equation form. Interpret the slope and the intercept of the market demand Compute the point elasticity of market demand for Krispy Kreme as price increases from PhP 20 to PhP C0mpute the point elasticity of market demand for Krispy Kreme as price decreases from PhP 40 to PhPYou were promoted as the manager of a new Clean-Well Sanitary Store that sells cleaning and sanitation products wholesale. You recently read in an article that there the price of vitamins is expected to increase by 20 percent. How will this affect your store’s sales of sanitation products? Items Selected Cross price elasticity Food supplements 0.34 Medicines 0.56 Foods 0.09 NO NEED TO GRAPH, JUST SHOW COMPUTATIONS
- 1. Which of the following might increase product price from P3 to P5? a. An improvement in production technology. b. A decline in the price of a substitute good. c. An increase in the price of a complementary good. d. Rising incomes if the product is a normal good. 2. An increase in price from P3 to P5 would: a. shift this firm’s MC curve to the right. b. mean that MR5 exceeds MC at Q3 units, inducing the firm to expand output to Q5. c. decrease this firm’s average variable costs. d. enable this firm to obtain a normal, but not an economic, profit. 3. At P4: a. this firm has no economic profit. b. this firm will earn only a normal profit and thus will shut down. c. MR4 will be less than MC at the profit-maximizing output. d. the profit-maximizing output will be Q5. 4. Suppose P4 is $10, P5 is $15, Q4 is 8 units, and Q5 is 10 units. This firm’s: a. supply curve is elastic over the Q4–Q5 range of output. b. supply curve is…Cikli is the manager of a firm that receives a revenue of RM3000 per month from product X and RM7000 per month from product Y. The price elasticity of demand for product X is -2.5 when original quantity (Q) for X and Y are 150 and 175 units, respectively and the cross price elasticity of demand between product X and Y is 1.1. If Cikli increases the price of good X by 1%. a. How much will Cikli's total revenue change for product X? b. How much is Cikli's new total revenue for both of the products? c. Plot a graph for product X and another for product Y, showing the before and after change in price. d. Give an appropriate example for each product. 2. Zulaikha and Ker Xin went to a shop to buy rice. Zulaikha wanted to buy 10kg of rice and Ker Xin wanted to buy RM20 worth of rice. Find the price elasticity of demand for each of them. 3. Nadzif always spends one-fifth of his income on food. Calculate his income elasticity of demand (use the midpoint formula).When the price of a certain product was considered to be "low", consumers spent $5 million monthly on it. After the price doubled, the total consumer expenditures increased to $7 million. Recently you read that this means that the demand curve for this product is upward sloping. Do you agree? Explain.
- Which factor that influences change in buying plan, other than price of good? Find out market equilibrium price and quantity from the demand function: QD = 15-4p and supply function: QS= - 1+ 6p. Show it graphically.11.If close substitutes are difficult to find in the short run, which of the demand curves in the figure best represents market demand in the short run? A) DI ( B) D2 C) Both curves are short-run curves. D) Both curves are long-run curves.What must be true about the demand function if E = 0?
