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- Can you think of an industry (or product) with near infinite elasticity of supply in the short term? That is, what is an industry that could increase Qs almost without limit in response to an increase in the price?The Stopdecay Company sells an electric toothbrush for $25. Its sales have averaged 8,000 units per month over the past year. Recently, its closest competitor, Decayfigh ter, reduced the price of its electric toothbrush from $35 to $30. As a result, Stopde cays sales declined by 1,500 units per month. What is the arc cross elasticity of demand between Stopdecays toothbrush and Decayfighters toothbrush? What does this indicate about the relationship between the two products? If Stopdecay knows that the arc price elasticity of demand for its toothbrush is 1.5, what price would Stopdecay have to charge to sell the same number of units as it did before the Decayfighter price cut? Assume that Decayfighter holds the price of its toothbrush constant at $30. What is Stopdecays average monthly total revenue from the sale of electric toothbrushes before and after the price change determined in part (b)? Is the result in part (c) necessarily desirable? What other factors would have to be taken into consideration?From the data in Table 5.6 about supply of alarm clocks, calculate the price elasticity of supply from: point J to point K, point L to point M, and point N to point P. Classify the elasticity at each point as elastic, inelastic, or unit elastic.
- Explain why using the midpoint formula for calculating the elasticity of demand gives the same result whether price increases or decreases, but using the initial price and quantity instead of the average does not.U.S. pharmaceutical companies charge different prices for prescription drugs to buyers in different nations, depending on elasticity of demand and government-imposed price ceilings. Explain why these companies, for profifit reasons, oppose laws allowing reimportation of drugs to the United States.U.S. pharmaceutical companies charge different prices for prescription drugs to buyers in different nations, depending on elasticity of demand and government-imposed price ceilings. Explain why these companies, for profit reasons, oppose laws allowing re-importation of drugs to the United States.
- In 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 rateMcdonald’s, a big burger joint, is charging $6 for its very famous Big Mac hamburger and selling around 20 million Big Mac in a year in Australia. Suppose Mcdonald’s increases the price of its Big Mac to $6.50. Consequently, quantity sold of the Big Mac falls to 17 million. How much revenue will Mcdonald’s gain? What can you infer about the price elasticity of demand (PED) for Mcdonald’s Big Mac? Assume in an alternative scenario, the increase in the price of Big Mac to $ 6.5 reduces its quantity sold to 19 million. How much revenue will Mcdonald’s gain now? What can you conclude about the PED now? Given the two scenarios presented in part a, which one do you think is more likely and why? Present evidence in 100 words or less to support your prediction. Suppose Mcdonals’s Big Mac and movie tickets have negative cross price elasticity of - 0.8. What does this number tell us on the relationship between the Big Mac and movie tickets? Suppose, The Village Cinemas, Australia’s leading…Please answer all the questions.R and B Railroad decided to reduce their fares to see if it would help their business. They reduced their ticket prices by 25 per cent on average and their sales increased from $325,000 per month to $334,750 on average. 1. How much is the price elasticity of demand of the ticket of R and B Railroad? Use a number, 2 decimal values, no commas, no space, no signs. *2. How much is the percentage change in the ticket price of R and B Railroad? Use a number, no decimal values, no commas, no space, no signs. *
- Mcdonald's, a big burger joint, is charging $5 for its very famous Big Mac hamburger and selling around 20 milion Big Mac in a year in Singapore. a. Suppose Mcdonald's increases the price of its Big Mac to $6 and still manages to sell the same quantity of the Big Mac. How much revenue will Mcdonald's gain? What can you infer about the price elasticity of demand (PED) For Mcdonald's Big Mac? Assume in an alternative scenario, the increase in the price of Big Mac to $6 reduces its quantity sold to 18 million. How much revenue will Mcdonalds gain now? What can you conclude about the PED now? b. Given the two scenarios presented in part a which one do you think is more likely and why? C. Suppose Mcdonds's Big Mac and movie tickets have negative cross price elasticity of 15. What does this number tell us on the relationship between the Big Mac and movie tickets? Suppose. The Golden Vilage (GV), Singapore's leading cinema exhibitor, decides to increase the price of its movie tickets by 10%.…Explain the term price elasticity of demand? How is it measured? What factors influence market demand for products? If the price elasticity is -3 and RM 100 is the marginal cost of product X, what should be the optimal sale price?In a city with a medium sized population, the equilibrium price for a city bus ticket is $1, and the number of riders each day is 9400. The short-run price elasticity of demand is -0.5, and the short-run elasticity of supply is 1. If the demand for bus tickets increased by 10% because of a rise in the world price of oil, what would be the new equilibrium price of bus tickets? (Hint: For each price, the quantity demanded is now 10% higher) New equilibrium price: __1__
