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Question
The elasticity of demand is used to relate what two variables? Name four factors that influence the elasticity of demand. For each factor, explain why and how it influences demand elasticity. Which demand is more elastic: the demand for Gatorade or the demand for all sports drinks? Why? What is the unit of measure for elasticity? If two firms merge, and the merging firm discontinues one of the overlapping products, will demand elasticity for the remaining product change? If so, why? If so, does demand become more or less elastic? Is the demand for cumin or the demand for Apple iPhones more inelastic? Why? Under what conditions, as it relates to elasticity, will an increase in the price of a product lead to a reduction in the total consumer spending in that market? The cross-price elasticity between yogurt and fruit is -1.2. Given this, are they substitutes or complements? Suppose that yogurt goes on sale and drops in price 12%. How much will the quantity of fruit change?
Use this information to determine October's expected cash payments for purchases. Use this information to determine October's expected cash payments.
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