Principles of Microeconomics (12th Edition)
12th Edition
ISBN: 9780134081199
Author: CASE
Publisher: PEARSON
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Chapter 4, Problem 1.8P
To determine
To show the changes in price and
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Florida, like several other states, has passed a law that prohibits “price gouging” immediately before, during, or after the declaration of a state of emergency. Price gouging is defined as “selling necessary commodities such as food, gas, ice, oil, and lumber at a price that grossly exceeds the average selling price for the 30 days prior to the emergency.” Many consumers attempt to stock up on emergency supplies, such as bottled water, immediately before and after a hurricane or other natural disaster hits an area. Also, many supply shipments to retailers are interrupted during a natural disaster. Assuming that the law is strictly enforced, what are the economic effects of the price gouging statute? Explain carefully.
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2) Did Netflix come out better with the 2009 price increase or the 2019 price increase? Using concepts that you have learned about supply and demand, explain why Netflix's revenues and profits increased or decreased in 2009 and in 2019 due to the 10% price increase.
Chapter 4 Solutions
Principles of Microeconomics (12th Edition)
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- You run a small business and would like to predict what will happen to the quantity demanded for your product if you raise your price. While you do not know the exact demand curve for your product, you do know that in the first year you charged $53 and sold 901 units and that in the second year you charged $42 and sold 1,186 units. If you plan to lower your price by 10 percent, what would be a reasonable estimate of what will happen to quantity demanded in percentage terms? Incorporate the point elasticity of demand using the initial price and quantity in your answer.arrow_forwardSly Bailey, the Trinity Mirror Chief Executive, sought to boost revenues of the Daily Mirror in 2004 by increasing the price of the tabloid newspaper by 3p, from 32p to 35p. The move is a sharp U-turn of the policy of Philip Graf, her predecessor, who tried to boost Daily Mirror circulation by cutting the cover price, triggering a price war with its rivals The Sun and the Daily Star. Ms. Bailey ended the price war as soon as she took over at Trinity Mirror in 2003. The Daily Mirror will now cost 5p more than the The Sun, which is owned by News International, parent company of the Times. It appears that The Sun has no immediate plans to increase its price. The Daily Mirror last increases its price in September 1999 but the tabloid newspaper market in the UK is fiercely competitive and it's not clear what the effect on its circulation will be." Can you help me in stating if the change in quantity demanded of daily mirror/change in the price of sun? Thank you.arrow_forwardGoat meat producers are struggling to keep up with demand as consumers turn to alternative meats, and a dwindling supply due to the drought sees prices jump to record levels.Prices remain at $9–10 per kilo, after over-the-hook prices hit an all-time high of $10.30 per kilo carcase weight in May this year.Meat and Livestock Australia's Julie Petty said last time they saw a significant price spike was in 2017 at $7.50 but current prices were unprecedented."For a producer, if you do have animals that are ready to be sent to market it's an excellent price to be receiving for these animals," Ms Petty said.However, she explained the drought and tough seasonal conditions forced many producers to destock their properties some time ago, which led to a reduced supply."We are seeing increased strong demand on both the international and domestic market," she said. Goat Industry Council Australia's Campbell McPhee said, as the world market was screaming out for more of Australia's goat meat, he…arrow_forward
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