What are the policy implications for the firm in terms of change in market equilibrium prices, quantity, and total revenues in the light of the following market conditions? (a) Rise in income level in the economy when goods supply is price inelastic and elastic. (b) Increase in costs of inputs such as

What are the policy implications for the firm in terms of change in market equilibrium prices, quantity, and total revenues in the light of the following market conditions? (a) Rise in income level in the economy when goods supply is price inelastic and elastic. (b) Increase in costs of inputs such as

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter5: Elasticity Of Demand And Supply

Section: Chapter Questions

Problem 14PAE

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. According to the Department of Statistics Malaysia (DOSM) in 2020, the production to five economics sectors namely services, manufacturing, agriculture, mining, and quarrying; and construction registered a contraction with a highly challenging domestic operating environment and lower global demand in response to Covid-19 Pandemic as shown in FIGURE 1. Therefore, it is putting into pressure especially to the Small-Medium Enterprises (SME) in Malaysia for making pricing decision on its products or services in relations to a firm's total revenue. briefly evaluate THREE (3) effects on a firm's total revenue in response between percentage change in quantity demanded for a goods or services with respect to the percentage change in price based on specific economics sectors
The demand for an economics textbook is given by: Q = 796 - 3p^2 Find the value of Q1 when demand is unit elastic and hence calculate the new price (rounded to two decimal positions) needed to increase Q by 100 units from the Q1 value. Note: Express the new price with two decimal positions (avoid intermediate roundings in the calculation process).
You are the manager of a firm that receives revenues of $20,000 per year from product X and $80,000 per year from product Y. The own price elasticity of demand for product X is −3, and the cross-price elasticity of demand between product Y and X is −1.6.How much will your firm's total revenues (revenues from both products) change if you increase the price of good X by 2 percent?Instructions: Enter your response rounded to the nearest dollar. If you are entering a negative number, be sure to use a (−) sign. $ _____________
You are a manager in charge of monitoring cash flow at a major publisher. Paper books comprise 50 percent of your revenues, which grow about 2 percent annually. You recently received a preliminary report that suggests the growth rate in ebook reading has leveled off, and that the cross-price elasticity of demand between paper books and ebooks is −0.4. In 2019, your company earned about $500 million from sales of ebooks and about $500 million from sales of paper books. If your data analytics team estimates the own price elasticity of demand for paper books is −3, how will a 2 percent decrease in the price of paper books affect your overall revenues from both paper books and ebooks sales? Instructions: Enter your response rounded to one decimal place. Your overall revenues will change by $_______ million.
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?
You are a manager in charge of monitoring cash flow at a major publisher. Paper books comprise 40 percent of your revenues, which grow about 2 percent annually. You recently received a preliminary report that suggests the growth rate in ebook reading has leveled off, and that the cross-price elasticity of demand between paper books and ebooks is −0.3. In 2019, your company earned about $600 million from sales of ebooks and about $400 million from sales of paper books. If your data analytics team estimates the own price elasticity of demand for paper books is −2, how will a 4 percent decrease in the price of paper books affect your overall revenues from both paper books and ebooks sales? Instruction: Enter your response rounded to one decimal place. Your overall revenues will change by $
An analyst for FoodMax estimates that the demand for its Brand X potato chips is given by ln QdX = 12.14 – 2.8 ln PX + 3.4PY + 0.7 ln AX, where Qx and PX are the respective quantity and price of a four-ounce bag of Brand X potato chips, PY is the price of a six-ounce bag sold by its only competitor, and AX is FoodMax’s level of advertising on Brand X potato chips. Last year, FoodMax sold 7 million bags of Brand X chips and spent $0.42 million on advertising. Its plant lease is $2.1 million (this annual contract includes utilities) and its depreciation charge for capital equipment was $2.8 million; payments to employees (all of whom earn annual salaries) were $0.8 million. The only other costs associated with manufacturing and distributing Brand X chips are the costs of raw potatoes, peanut oil, and bags; last year FoodMax spent $2.8 million on these items, which were purchased in competitive input markets. Based on this information, what is the profit-maximizing price for a bag of…
Q1 Consider the following estimated price, cross and income elasticity for selected commodities in the Canadian market. Fill in the blanks based on the fact whether the Demand is elastic, inelastic Products are substitutes or complements Products are inferior, normal or independent Estimated coefficients of elasticity and types of goods/products: Ey for mixed fruit is 3.25. This product is ……………….. Exy for cheese and butter is -0.25. These products are ………………… Ed for life saving medicine = 0. Demand for medicine is ………………. Exy for onion and laptop is 0. These products are ……………….. Exy for electricity and natural gas is 1.2. These products are ……………….. Ed for juice is 2.4. The demand for juice is …………………….. Ed for salt is 0.15. The demand for salt is………………… Ey for whole wheat bread is -0.5. This product is ………………….
The demand equation for a particular candy bar is px + x + 20p = 3000 where 1000x candy bars are demanded per week when p dollars is the price per bar. If the current price of the candy is 49 dollars per bar and the price per bar is increasing at the rate of 0.2 dollars each week, find the rate of change in the demand.
What are the policy implications for the firm in terms of change in market equilibrium prices, quantity, and total revenues when there is an increase in costs of inputs such as labour when goods demand is price inelastic and elastic.
The demand equation for a particular candy bar is px + x + 20p = 3000 where 1000x candy bars are demanded per week when p cents is the price per bar. If the current price of the candy is 49 cents per bar and the price per bar is increasing at the rate of 0.2 cents each week, find the rate of change in the demand.
The demand equation for a firm’s product has been estimated as Ln Qx = 7.3 – 2 Ln Px + 0.5 Ln I + 0.25 Ln Py - 1.5 Ln Pz, where Qx represents unit sales of brand X, Px is the price of brand X, I is per-capita income, Py is the price of brand Y, and Pz is the price of brand Z. (A)Write this demand equation in its multiplicative form. (B) What is the price elasticity of demand for brand X? is demand price elastic or inelastic? (C)What is the income elasticity of demand for brand X? What type of good is brand X?