The function Q = F(p,ps,y) describes how the monthly demand, Q (measured in 100s of Widgets), for Grinch Inc. Widgets depends on the variables: • p = the price/Widget that Grinch Inc. sets (measured in S). • Ps= average price of substitutes for Grinch Inc. Widgets (measured in $). • y = average disposable income in the market for Widgets (measured in $1000s). When average disposable income in the market is $4200 and Grinch Inc.s price is $12 and the average price of substitutes is $11... · Q = 66 Op=-0.28 2ps = 0.52 Qy = 0.31 If average monthly income increases to $4400 and the average price of substitutes increases to $11.35, by approximately how much can Grinch Inc. increase their price while keeping demand for their Widgets fixed at Q = 66 ? Ο Δρ = 0.87 O There is no way to estimate this from the given information.. O Ap = 0.53 O Ap = 0.72 .

The function Q = F(p,ps,y) describes how the monthly demand, Q (measured in 100s of Widgets), for Grinch Inc. Widgets depends on the variables: • p = the price/Widget that Grinch Inc. sets (measured in S). • Ps= average price of substitutes for Grinch Inc. Widgets (measured in $). • y = average disposable income in the market for Widgets (measured in $1000s). When average disposable income in the market is $4200 and Grinch Inc.s price is $12 and the average price of substitutes is $11... · Q = 66 Op=-0.28 2ps = 0.52 Qy = 0.31 If average monthly income increases to $4400 and the average price of substitutes increases to $11.35, by approximately how much can Grinch Inc. increase their price while keeping demand for their Widgets fixed at Q = 66 ? Ο Δρ = 0.87 O There is no way to estimate this from the given information.. O Ap = 0.53 O Ap = 0.72 .

Macroeconomics

13th Edition

ISBN:9781337617390

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter3: Supply And Demand: Theory

Section: Chapter Questions

Problem 19QP

See similar textbooks

Similar questions

The demand function for electric fans is as follows: • Qx = 100 – 0.5Px + 0.03I + 3Py where: • Qx = quantity demanded of electric fans • Px = average price of an electric fan • I = average income • Py = average price of an air conditioner Assume that the average price of an electric fan is $50, an air conditioner costs $400 and average income is $4,000. Determine or calculate the following: 1. The slope of the demand curve, 2. If air-conditioners are complimentary or substitutionary to electric fans with respect to the coefficient and, 3. If electric fans are a normal or inferior good with respect to the income coefficient.
Suppose the demand function for product X is estimated by the equation: QDX= -2PX + 0,5PY - 0,2PZ + 1,2I. In there:QDX is the quantity demanded of product XPX is the price of product XPY is the price of product YPZ is the price of product ZI is the average income of consumersa/ Please make an argument to determine the relationship between two products X and Y, X and Z.b/ Please make an argument to determine whether product X is an ordinary good or a low-end good
A TV channel has estimated the demand for its service to be givenby the following function: Q=9.83p-1.2A2.5Y1.6P0-1.4whereQ = monthly sales in unitsP = price of the service in $A = promotional expenditure in $’000Y = average income of the market in $’000P0 = price of ‘home movies’ in $ The current price of the TV channel is $60, promotional expenditure is$120,000, average income is $28,000, and the price of ‘homemovies’ is$45.Indicate whether the following statements are true or false, givingyour reasons and making the necessary corrections h. Current sales are over a million units a month. i. The demand curve for the channel is given by:Q=9.83p-1.2j. The channel’s sales are more affected by the price of ‘home movies’ than by the price of its own service.k. If the channel increases its price this will reduce its profit.
A TV channel has estimated the demand for its service to be given by the following function: Q=9.83p-1.2A2.5Y1.6P0-1.4 where Q = monthly sales in units P = price of the service in $ A = promotional expenditure in $’000 Y = average income of the market in $’000 P0 = price of ‘home movies’ in $ The current price of the TV channel is $60, promotional expenditure is $120,000, average income is $28,000, and the price of ‘homemovies’ is $45. Indicate whether the following statements are true or false, giving your reasons and making the necessary corrections e. ‘Home movies’ are a substitute for the TV channel.f. A 5 per cent increase in income will increase demand by 16 per cent.g. A 10 per cent increase in price will reduce demand by 12 per cent.h. Current sales are over a million units a month. i. The demand curve for the channel is given by:Q=9.83p-1.2j. The channel’s sales are more affected by the price of ‘home movies’ than by the price of its own service.k. If the channel increases its…
Suppose a certain home improvement outlet knows that the monthly demand for framing studs is 2,700 when the price is $5.46 each but that the demand is 3,300 when the price is $5.34 each. Assuming that the demand function is linear, write its equation. Use p for price (in dollars) and q for quantity.
a)Assume that the typical consumer always spends a small share of her overall budget on Vietnamese meals and use the utility maximization conditions to find the demand for Vietnamese food of the typical consumer (keep in mind that since utility is quasi-linear, you can find demand without information about the consumer’s weekly budget). b) Sum across consumers to find the weekly market demand for Vietnamese meals in NYC.
MK Corp estimates that its demand function is as follows: Q = 400 - 12:5P + 25A + 14Y+ 10P* where Q is the quantity demanded per month, P is the product’s price (in Rs.), A is the firm’s advertising expenditure (in Rs.’000 per month), Y is per capita disposable income (in Rs’000), and P* is the price of AJ Corp. a. During the next five years, per capita disposable income is expected to increase by Rs. 5,000 and AJ is expected to increase its price by Rs 12. What effect will this have on the firm’s sales volume? b. If MK wants to change its price by enough to offset the above effects, by how much must it do so? c. Compare the profitability of maintaining sales volume by either changing price or changing advertising spending. d. If MK’s current price is $60 and it spends $10,000 per month on advertising, while per capita income is $25,000 and AJ’s price is $70, calculate the price elasticity of demand with the price change. e. What can be said about the effect of the above price change…
what problem could arise with consumers' net demand functions as any price becomes zero? what axiom of consumer theory is involved here? how might it be changed to exclude this possibility?
T/F Normal goods demand increase with the increase in the income of the consumer and vice versa.
Find the demand equation using the given information. (Let x be the number of items.) A company finds that it can sell 120 items at a price of $120 each and sell 160 items at a price of $100 each.
4GE 10:01 ITEMS INFO 8. 2 attempts remaining. TAMU_QID: BM_00048 Consumers will demand 1070 items at a price of $2.75 per item. When the price per item increases to $5, the number of items demanded will decrease by 45. Write the linear demand function, p(x), for this item. Enter your answer in slope-intercept form, using exact numbers. p(x) = Submit answer
Eren’s two main hobbies are taking vacations overseas (V) and eating expensivemeals (M). His utility function is given as: U(V,M) = V2MLast year, the average price of taking a vacation overseas was US$200 and the averageprice of an expensive meal is $50. However, due to supply problems in Onions, theaverage price of an expensive meal rose to $75. The average price of a vacation did notchange. His income, which is $1500, did not change. Suppose that the Department of Welfare wants to know how much should begiven to Eren to offset his change un utility due to the price increase of an expensivemeal. Calculate the compensative variation (CV).