User Account

All Pages

elastics and inelastics, Microeconomics

Assignment Help:
You just opened a flower shop and are trying to understand pricing issues. You were told that elasticities are very important in determining prices and what products to supply, so you decide to investigate this concept.

You call your friend, an economics professor, and ask, "What is the price elasticity of demand? What determines it? What is elastic and inelastic demand?"

To really understand it, compute the following price elasticities of demand:

•The price of a laptop increases by 20% and there is a 40% drop in the quantity demanded.
•The price of a pack of cigarettes increases by 10% and there is a 5% drop in the quantity demanded.
•The price of water increases by 15% but there is no drop in the quantity demanded.
Of the above examples, which is more elastic, and which is the least elastic? Why? Answer the following questions:

•Why is elasticity an important concept for a business? What if national income went up? How would that affect elasticity?
•What is the price elasticity of supply? What determines it?
•Compute the following price elasticities of supply:
?The price of a hotel room increases by 20%, and the quantity supplied increases by 10%.
?The price of health care goes up by 50% , and the quantity supplied increases by an equal amount.
?The price of a book increases by 10%, and the quantity supplied increases 20%.
?In the above examples, which is more elastic and which is the least elastic? Why?
•What kind of supply and demand elasticities would the following goods have, and why?
?Bridge tolls
?Beachfront properties
?Gourmet coffee
?Luxury automobiles
?Gasoline
?Cell phones
?Computers
?College tuition
Now that you are an expert on elasticities, what do you think would be the best time of year to raise prices, and why? What do you think the elasticities are in the flower business? Use graphs and hypothetical tables to support your answer. Please submit your assignment.

Related Discussions:- elastics and inelastics

Increasing Economic Inequality, What are the economic implications of incom...

What are the economic implications of income inequality? How can economic theory be helpful to analyze the causes and impact of income inequality? What are the concerns and how the

Average-marginal relationship., average-marginal relationship

average-marginal relationship

Determine the profit-maximizing price, Determine the Profit-Maximizing Pric...

Determine the Profit-Maximizing Price If a firm targets a 25 % rate of return on sales, and has unit costs of production of $100, what price should it charge if it uses cost-p

Keynesian models, typical assumptions

typical assumptions

Structure of national income, STRUCTURE OF NATIONAL INCOME: The struct...

STRUCTURE OF NATIONAL INCOME: The structure or composition of national income of an economy explains the relative significance of the different producing sectors in an economy

Bain limit price theory, #question.case study of bain limt price theory

#question.case study of bain limt price theory

Define golloping inflation, what is golloping inflation

what is golloping inflation

Macroeconomics, A government is currently operating with an annual budget d...

A government is currently operating with an annual budget deficit of $40 billion. The government has determined that: • Every $10 billion reduction in the amount of bonds it issue

Healthcare economics, #quesExamine the expenditure trends over the last 40 ...

#quesExamine the expenditure trends over the last 40 years. What are the direction and magnitude of changes in spending in and between these various categories (with the exception

#title.microeconomics issues., how microeconomic issues maybe represented ...

how microeconomic issues maybe represented using production posibility curve

Write Your Message!

Captcha
Order Assignment

Featured Services

Order Now

Popular Subjects

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