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- en hired as an economic consultant by Google and given the lollwrg derrand wedfor wh st Price of Good X (Millions) Quantity Demanded for XQuantity Demanded ta (Millions) 260 240 5. Y Mllions) 200 220 240 10 15 220 20 200 260 Your advice is needed on the following questions: A) Draw the demand and supply curves for the above market. (4 marks) B) Calculate the price elasticity of demand for software X if the price of soltware X increases tom5 millen to 10 mil p t S whether it is elastic or inelastic.(4 marks) C) Calculate the cross elasticity of demand of software Y when the price of X falls from 20 milion lo 10 Mlion hdie between X and Y. (4 marks) D) Draw diagrams for the demand of X. If other things are not constant what will be the impact on the dend D E) Calculate the equilibrium price and quantity demanded and supply of the above market Label the equilm prt be quantity, and the equilibrium price. (4 marks) O Type here to search4. You have been hired as a consultant to estimate the demand for various brands ofcoffee in the market. You are provided with annual price data for two years by U.S.state and the quantities sold. You want to estimate a demand function for coffeeusing this data. What problems do you think you will encounter if you estimatedthe demand equation by OLS?Creative Homework/Short Project Assume that you arean entrepreneur who runs a bakery that sells glutenfree breads and cakes. You believe that the currenteconomic conditions merit an increase in the price ofyour baked goods. You are concerned. however, thatincreasing the price might not be profitable becauseyou are unsure of the price elasticity of demand for yourproducts. Develop a plan for the measurement of priceelasticity of demand for your products. What findingswould lead you to increase the price? What findingswould cause you to rethink the decision to increaseprices? Develop a presentation for your class outlining(I) the concept of elasticity of demand, (2) why raisingprices without undetstanding the elasticity would bea bad move. (3) your recommendations for measurement. and (4) the potential impact on profits for elasticand inelastic demand
- If you wanted to increase demand for your restaurant butare unable to lower prices or increase advertising, whatsteps might you take?Creative Homework/Short Project Assume that you arean entrepreneur who runs a bakery that sells glutenfree breads and cakes. You believe that the currenteconomic conditions merit an increase in the price ofyour baked goods. You are concerned, however, thatincreasing the price might not be profitable becauseyou are unsure of the price elasticity of demand for yourproducts. Develop a plan for the measurement of priceelasticity of demand for your products. What findingswould lead you to increase the price? What findingswould cause you to rethink the decision to increaseprices? Develop a presentation for your class outlining(1) the concept of elasticity of demand, (2) why raisingprices without understanding the elasticity would bea bad move, (3) your recommendations for measurement, and (4) the potential impact on profits for elasticand inelastic demand6. Elasticity and total revenue The following graph shows the daily demand curve for bikes in Denver. Use the green rectangle (triangle symbols) to compute total revenue at various prices along the demand curve. Note: You will not be graded on any changes made to this graph. 2 Total Revenue PRICE (Dollars per bike) 88NR S 89 88 89 O 300 275 18 27 35 45 54 53 72 QUANTITY (Bikes) 91 Demand 90 99 108
- Which of the following products comes closest to having a perfectly price inelastic demand? O A. iPhones O B. bus rides OC. cholesterol medication in general O D. gasolineSnooki, a new marketing intern, was a little scatterbrained during the first meeting with her manager, when she made four statements about pricing. Which one of her four statements about pricing was correct? a. A product with an elastic demand is likely to face little competition. b. An EDLP retailer offers many price promotions. c. A product with an elasticity of demand of -0.7 will enjoy increases in revenue when prices are cut. d. Cost-plus pricing is not the perfect pricing strategy because the pricing method ignores customers’ willingness to pay and competitors’ pricing strategy.what are the reason/s of banning McDonald’s from other country’s?
- Vik and Fleet produce trainers in the sports-shoe market. For one of their main productsthey have the following demand curves: Vik PV =175 - 1:2Qv, Fleet Pf = 125 - 0:8Qfwhere P is in Rs. and Q is in pairs per week. The firms are currently selling 80 and 75 pairsof their products per week respectively.a. What are the current price elasticities for the products?Explain how the demand curves for normal productsand to, prestige products differ. What are demandshifts and why are they important to marketetS? Howdo firms go about estimating demand? How can marketetS estimate the elasticity of demand?What does the price elasticity of demand indicate? How isthe perfectly inelastic demand curve illustrated . Give an example of a good which has perfectly inelastic demand and write down what the elasticity of perfectlyinelastic demand is equal to. What does the income elasticity of demand indicate ? What is the expected sign for income elasticity of demand for an inferior good ?
