Explain the concept of elasticity of demand In the real world‚ prices of different products vary day by day‚ however‚ the effect it has on the demand is a concept that is very important to understand. When a consumer has an ability or willingness to buy a certain number of products at a given price‚ it is known as demand. Elasticity of demand is the measure of change in quantity demanded of a product when there is change in factors that effect demand. There are 3 main types of elasticity of demand;
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The goal of Unilever Brazil is to target the low income consumers‚ in order to gain market share among this segment they should develop an extension of Minerva brand with a small packaging and a cheaper formulation that maintains a good quality. The low income consumers are the most discerning consumers‚ and when spending from a limited budget they cannot afford to waste money on products they do not trust to be effective . This segment values price‚ effectiveness and fragrance‚ and wash manually
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1a) Explain how the different features of monopolistic competition and oligopoly affect price and output determination in these market structures. Both monopolistic competition (MPC) and oligopoly generally determine price and output based on the profit-maximising condition that marginal cost (MC) equals to marginal revenue (MR). Due to the different features of both monopolistic competition and oligopoly such as the barriers to entry (BTE)‚ which affects the number of sellers as well as market
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price paid by the purchaser for goods and services (includes taxes) 5. Ceteris Paribus: “all things remaining constant” (Latin phrase) used to illustrate many concepts in economics 6. Law of Demand: ceteris paribus‚ consumer demand will decrease as price increases‚ and consumer demand will increase as price decreases. 7. Law of Supply: quantity supplied is directly proportional to price‚ so a producer will supply more of a good or service if the price is higher 8. Complementary Goods: two goods
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Arjun Jairath 120237551 In 2013 changes in child benefits came into effect in the UK. In particular‚ child benefit was gradually withdrawn from individuals earning over £50‚000 a year and completely withdrawn for individuals earning more than £60‚000 a year. Investigate‚ using the standard labour supply model‚ how this change in benefits will affect labour supply decisions for a single mother with two children who is able to find work at £30/hour. Assume that she would opt-out of maximum working
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firms will be ps = 200. Otherwise firms would be losing money and would have an incentive to leave the industry‚ and the industry would not be in long-run equilibrium. Thus‚ we know that the tax will be passed on entirely to consumers‚ which means that the price paid by consumers will be pd = ps + t = 200 + 50 = 250. Setting the inverse demand curve equal to that price‚ we can compute the long-run after-tax equilibrium quantity‚ 250 = 700 − 5Y ⇒ YtLR = 90. To determine the number of firms in the industry
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and conduct on-the-spot surveys for people passing by the streets in order to gain more opinion and expectations regarding to our product. Knowing specific locations of consumers will also provide us an opportunity to hold any special campaign where we can show the participants our current and future products. Outer rims are consumers who are located far away specifically in other parts of the world. It’s a lot harder to target these people as it may cost us a lot of money to market them. Probably the
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Microeconomics Vocabulary |Word |Definition | |Market |A market is any situation or place that enables the buying and selling of goods and| | |services | |Perfect Competition |Perfect competition is a market structure
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absence of any central authority; it looks like a miracle as to how such an economy functions. There can be confusion and chaos in the country when the producers choose to produce cloth and workers choose to work for the furniture industry‚ while the consumers are in need of cars. In order to solve the central problems‚ such an economy uses the impersonal forces of the market demand and supply or the price mechanism. Such an economy uses the impersonal forces of the market demand and supply or the
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function[pic]. 1) Is the assumption that ‘more is better’ satisfied for both goods? 2) What is [pic] for this utility function? 3) Is the [pic] diminishing‚ constant‚ or increasing as the consumer substitutes [pic] for [pic] along an indifference curve? 2. (25 points) A consumer purchases two goods‚ food [pic] and clothing [pic]. Her utility function is given by [pic]. The price of food is [pic] ‚ the price of clothing is [pic]‚ and the consumer’s income is [pic]. 1) What
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