Fur industry blamed the sales decline on the recession

Assignment Help Business Economics

Reference no: EM13888473

From 1982 to 1986 retail sales of furs in the U.S. rose from $0.4 billion to $1.9 billion. After this time, there was no additional growth until 1989 when sales increased slightly to $2 billion. Subsequently there was a plunge in fur sales which dropped 40% in 1992. In 1992 a spokesperson for fur industry blamed the sales decline on the recession.

a) If income elasticity of demand for furs is 3, how much of the decline in furs sales in 1990 can be attributed to change in consumers' income? (adjusted for inflation, total income increased 1% in 1990) explain

b) In 1990 the government imposed a 10% tax on furs. If the price elasticity of demand for furs is 1.5, how much of the decrease in fur sales can be attributed to this tax?(assume that the price of furs rose by 10% after the tax was imposed)

Reference no: EM13888473

Questions Cloud

Stored value and smart cards are forms of electronic banking : The Depository Institutions Deregulation and Monetary Control Act of 1980 did not. Stored value and smart cards are forms of electronic banking. Raising the reserve requirement or the discount rate always decreases the money supply.

Explaining the impact of language on critical thinking : Develop a 250 word essay explaining the impact of language on critical thinking and decision making. What are the challenges presented by language and how can one manage these challenges

How would the rate of return change if the project : How would the rate of return change if the project delivered $50,000 in additional revenue and generated cost savings of $25,000 in the first year?

The only distinction among merchant wholesalers and agents : 1.Comment on this statement: The only distinction among merchant wholesalers and agents and brokers is that merchant wholesalers take title to the products they sell.

Fur industry blamed the sales decline on the recession : From 1982 to 1986 retail sales of furs in the U.S. rose from $0.4 billion to $1.9 billion. After this time, there was no additional growth until 1989 when sales increased slightly to $2 billion. Subsequently there was a plunge in fur sales which drop..

What is the growth machine : Read "The Growth Machine versus the Earth." What is the "Growth Machine?" Then define "sustainable environment." What are the problems associated with the growth machine? How are the problems preventing us from having a sustainable environment

Distance s through which the piston rises : When 2140 J of heat flows into the gas, the internal energy of the gas increases by 1580 J. What is the distance s through which the piston rises?

Sovereignty in monetary and fiscal policies : The economic union can be beneficial but it also cost a nation its sovereignty in monetary and fiscal policies. For instance, Greece could not use monetary policies to help boost its economy. Do you think Greece would have been better off not joining..

Measured inaccurately by either income or expenditure method : Although GDP is a reasonably good measure of a nation's output, it does not necessarily include all transactions and production for that nation. Which of the following scenarios are either not accounted for or measured inaccurately by either the inco..

User Account

All Pages