Identify the income elasticity type

Assignment Help Business Economics
Reference no: EM133079450

i) The president of the Micro Brewing Corporation asks you, as the company accountant with knowledge in economics, to forecast changes in consumer beer purchases associated with a proposed price change. You conduct a survey and find that if the price of a six-pack increases from $6 to $8 the quantity demanded will decrease from 2,000 units to 1,600 units a month. Should the Micro Brewing Corporation raise its price? Explain the economic rationale using both the Total Revenue Test and the Coefficient of Price Elasticity of Demand. Show your calculations.  Use the information in the table below to identify the income elasticity type of each of the following products, A to D. Show your calculations. 

Product

Percent change in income

Percent change in quantity demanded

Income elasticity type

A

9

12

 

B

-6

6

 

C

3

3

 

D

6

-3

 

Reference no: EM133079450

Questions Cloud

List down the basic functions of management : 1. List down the basic functions of management
What will be the diluted EPS : A company's net income is $250,000, and its weighted-average shares outstanding are 40,000. What will be the diluted EPS
What is the monopolistic outcome : What is the monopolistic outcome in terms of price and quantity? Marginal revenue: MR = 200 - Q/200. Please demonstrate on a graph.
Describe the aspects of health : Describe the aspects of health that make it a consumption good and those that make it an investment good
Identify the income elasticity type : Use the information in the table below to identify the income elasticity type of each of the following products, A to D. Show your calculations.
Unemployment impacted by phases of the business cycle : What has GDP been for the latest three quarters here in the US? How is unemployment impacted by the phases of the business cycle?
What is the labor quantity variance for the month : Sunland's actual payroll for direct labor during January was $101130. What is the labor quantity variance for the month
Calculate the inflation rate for 2020 : Question 1. Here are the details on 4 bonds. Current market rates are 5.5% for all 4 bonds.. Which bond would you buy and why? Hints: Current price is the 'As
Determine the net differential income : Keating Co. is considering disposing of equipment with a cost of $63,000 and accumulated depreciation of $44,100. Determine the net differential income

Reviews

Write a Review

Business Economics Questions & Answers

  Economics assignment

This document contains various important questions and their appropriate answers in the subject field of Economics.

  Demand and supply curves

Economics is the study of the principles governing the allocation of scarce means among competing ends when the objective of the allocation is to maximize the attainment of the ends.

  Long-run perfectly competitive equilibrium for the firm

Evaluate Government intervene and correct this situation?(a) Explain the concept of a concentration ratio. A rise in the price of magarine Explain the impact of external costs and external benefits on resource allocation long-run perfectly c..

  Supply and demand diagrams

Explain each of the following using supply and demand diagrams,  With the use of a graph, explain how these two programs affect cigarette consumption and the price of cigarettes.

  Case study: fisher-price toys

The case study of the Fisher-Price Toys, Inc., a popular case in basic economics and management from the prestigious Harvard Business School.

  Draw the production possibility curve

Draw the production possibility curve and a. Define consumer surplus and producer surplus.

  Tax revenue

The Australian government administers two programs that affect the market for cigarettes

  Maximize total welfare

How many tickets to sell to maximize total welfare.

  Difference between the cv and the ev

The change in consumer surplus (?CS) is not "theoretically" justifiable like the CV and EV but it continues to be the most widely used measure of consumer welfare change. Explain how this can be reconciled

  Depict von neumann-morgenstern utility index u in a diagram

Depict the von Neumann-Morgenstern utility index u in a diagram

  What is the market solution

What is the market solution (market price and quantity) and What is the total surplus of the society under the market solution

  Calculate gross national product and net national product

Calculate gross national product and net national product

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!

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