User Account

All Pages

Define the price elasticity of demand

Assignment Help Microeconomics
Reference no: EM132013514

Question: Elasticity and Its Application

Over the last year your boss has noticed that it would be useful for your firm to understand how consumers behave when variables in the market change and how these changes affect the total revenue for your product. You have been asked to do an analysis for your product, Good A, by addressing the following questions and reporting the results to your boss in a formal paper.

1. Define the price elasticity of demand? What information does it provide? How is it calculated?

2. Define the income elasticity of demand? What information does it provide? How is it calculated?

3. Define the cross-price elasticity of demand? What information does it provide? How is it calculated?

4. What is total revenue? How is it calculated?

5. Define elastic, inelastic, and unitary elasticity means. How are these related to total revenue? Explain your answers.

6. With respect to the price elasticity of demand, construct a graph using the data in Figure1. Illustrate the ranges on the demand curve that indicate elastic, inelastic, and unitary elasticity. Explain your answers. Enter non-numerical responses in the same worksheet using textboxes.

7. Calculate the total revenue for each level of demand and post into the table, Figure 1. (Copy and paste this table into the Microsoft Word document that will form part of your submission.)

8. Using the midpoints formula presented in the textbook, calculate the price elasticity coefficient for each price level, starting with the coefficient for the $4 to $6 level. For each coefficient, indicate each type of elasticity: elastic demand, inelastic demand, or unitary demand. Post your answers into the table, Figure 1.

9. Assume that the income of consumers changes by 10%, and as a result the quantity demanded for Good A changes by 8%. What is the income elasticity of demand for Good A? What does this mean for your company?

10. Assume that the price of competing Good B decreases by 5% and as a result, the quantity demand for Good A decreases by 8%. What is the cross-price elasticity for your product? What type of goods are Good A and Good B?

Information related to above question is enclosed below:

Attachment:- week2project.rar

Reference no: EM132013514

Questions Cloud

Compute the depreciation expense on the printer : Compute the depreciation expense on the printer for the year ended December 31, 2015, using the straight-line method
Establish and assign responsibility for recording systems : Why is it important to establish and assign responsibility for recording systems that will track continuous improvements of sustainability approaches?
Explain what tools you would use to educate your stakeholder : Explain what tools you would use to educate your stakeholders on the results you have received from analytics.
Strategic management process : In a constantly and rapidly changing environment, developing and implementing a competent strategic plan is central to organization stability and viability.
Define the price elasticity of demand : Define the price elasticity of demand? What information does it provide? How is it calculated? Define the income elasticity of demand?
What is the net present value : Redwood Orchards Organics purchased a new composter at a cost of $88,000. What is the net present value if the cost of capital is 12 percent
What is a qualitative variable : What is a qualitative variable? Give an example. What is a quantitative variable? Give an example.
What is data in correlation to business statistics : What is data in correlation to business statistics? Is it difference from information? What is needed for business decision-making? Data, information or both?
Explain what is continuous improvement : Explain what is continuous improvement and how to apply it to resource efficiency?

Reviews

Write a Review

Microeconomics Questions & Answers

  The free rider problem

Question: Explain why the free rider problem makes it difficult for perfectly competitive markets to provide the Pareto efficient level of a public good.

  Failure of the super committee is good thing for economy

Some commentators have argued that the failure of the “Super committee” is good thing for the economy?  Do you agree?

  Case study analysis about optimum resource allocation

Case study analysis about optimum resource allocation: -  Why might you suspect (even without evidence) that the economy might not be able to produce all the schools and clinics the Ministers want? What constraints are there on an economy's productio..

  Fixed cost and vairiable cost

Questions:  :   Which of the following are likely to be fixed costs and which variable costs for a chocolate factory over the course of a month?  Explain your choice.

  Problem - total cost, average cost, marginal cost

Problem - Total Cost, Average Cost, Marginal Cost: -  Complete the following table of costs for a firm.  (Note: enter the figures in the  MC   column  between  outputs of  0 and 1, 1 and 2, 2 and 3, etc.)

  Oligopoly and demand curve problem

Problem based on Oligopoly and demand curve,  Draw and explain the demand curve facing each firm, and given this demand curve, does this mean that firms in the jeans industry do or do not compete against one another?

  Impact of external costs on resource allocation

Explain the impact of external costs and external benefits on resource allocation;  Why are public goods not produced in sufficient quantities by private markets?  Which of the following are examples of public goods (or services)? Delete the incorrec..

  Shifts in demand and movements along the demand curve

Describe the differences between shifts in demand and movements along the demand curve. What are the main factors which can shift the demand curve? Explain why they cause the demand curve to shift. Use examples and draw graphs to support your discuss..

  Article review question

Article Review Question: Read the following excerpts from the article "Fruit, veg costs surge' by Todd, Dagwell, published in the Herald on January 25th 2011 and answer questions below:

  Long-term growth, international trade & globalization

Long-term Growth, International Trade & Globalization:- This question deals with concepts such as long-term growth, international trade and globalization. Questions related to trade deficit, trade surplus, gains from trade, an international trade sce..

  European monetary union (emu) in crisis

"Does the economic bailout of Spain and Greece spell the beginning of the end for the European Monetary Union (EMU)?"

  Development game “settlers of catan”

Read the rules of the game, the overview and the almanac for the Development Game "Settlers of Catan"

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd