Determine the average consumer disposable income

Reference no: EM13213100

Suppose that the current market price of VCRs is $300, that average consumer disposable income is $30,000, and that the price of DVD players (a substitute for VCRs) is $500. Under these conditions annual U.S. demand for VCRs is 5 million per year. Statistical studies have shown that for VCRs the own-price elasticity of demand is -1.3. The income elasticity of demand for VCRs is 1.7. The cross-price elasticity of demand for VCRs with respect to DVDs is 0.75. Use this information to predict the annual number of VCRs sold if increasing competition from Asia causes VCR prices to fall by 10% with income and the price of DVDs is unchanged. 4.35 million 5.65 million 5.85 million 4.58 million 5 million

Reference no: EM13213100

Questions Cloud

Explain how many grams of chlorine gas must be reacted : How many grams of chlorine gas must be reacted with excess sodium iodide if 20.0 moles of sodium chloride are needed?

What is the expected equilibrium price and quantity of bonds : An economist has estimated that, near the point of equilibrium, the demand curve and supply curve for bonds can be estimated using the following equation B: Price= -2/5 quantity + 940 Equation 1 B: Price= quantity + 500 Equation 2 a.

State a lewis structure consists information about covalent : Identify the following compound made of H, N, and O described below. Write a Lewis structure that is consistent with the information given.

Mix of long-term and short-term borrowing : What are the main factors that should be taken into consideration when deciding on the mix of long-term and short-term borrowing necessary to finance the expansion?

Determine the average consumer disposable income : Suppose that the current market price of VCRs is $300, that average consumer disposable income is $30,000, and that the price of DVD players (a substitute for VCRs) is $500. Under these conditions annual U.S. demand for VCRs is 5 million per year.

Should xyz hire each day to maximize its profits : Firm XYZ measured its MP of labor curve to be the following: MP = 4000 - 2L where L is the number of hours of labor hired per day. XYZ produces gadgets that are sold for $20 each and is able to hire workers for $10 per hour. How many hours of labo..

Explain what is the operator for this potential energy : where e is the magnitude of the charge on an electron and ε0 is the vacuum permittivity (a fundamental constant). What is the operator for this potential energy?

What is the supply curve of hats shifted upward : Last month Jones Hat Company sold 100 hats at $10 each. This month it raised the price of hats to $11 and sold 101 hats. This result indicates that another factor, such as income, changed, shifting the demand curve for hats to the right.

State cesium atoms are the largest naturally occurring atoms : Cesium atoms are the largest naturally occurring atoms. The radius of a Cs atom is 2.62angstroms. How many Cs atoms would have to be laid side by side to give a row of Cs atoms

User Account

All Pages