Price Elasticity of Demand Shinan Chen Week Two Assignment Price Elastic of Demand 1. If the demand for corn increases due to its use as an alternative energy source‚ what will happen to the supply of corn ’s substitute such as soybean? To answer this‚ first we have to understand what determinants will shift demand and supply. There are five demand determinants‚ they are T-I-P-E-N. Taste of preference‚ income‚ price of complements and substitutes‚ expectation of consumer regarding future
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Fisher-Price Case Analysis Fisher-Price Toys‚ a producer of quality toys for preschool children has to make a decision on whether to introduce a new riding toy (ATV Explorer) to the market. The company is faced with the difficult situation of whether to price this product higher than the usual price for Fisher-Price products. The company was unsure that customers would be interested in the product at a higher than usual price. SWOT ANALYSIS Internal Strengths * Fisher –Price ranked 3rd
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Demand 10. The long-run price elasticity of demand for a product is generally _________ the short-run elasticity for the same product. A. lower than B. equal to C. higher than D. not comparable to 11. Assume the demand function for skin care products is given by Q = 1‚000 – 20 P + 5I. If P=$25 and I=$1‚000 currently‚ then: A. skin care products are a normal good. B. the elasticity of demand is equal to 11. C. skin care products are inferior. D. The price is too high 12. If the demand
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Assignment Eco 101 1. a) Briefly explain the factors that determine the price elasticities of demand and supply. b) The accompanying table presents the prices and associated demand quantities of ready-made garments of Bangladesh at different world incomes. Price of RMG Quantity demanded when Quantity demanded when world GDP is $ 65 trillion world GDP is $ 70 trillion $10 500‚000 800
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1. Name two types of market failure. Explain why each may cause market outcomes to be inefficient. Market Power- In some markets‚ a single buyer or seller may be able to control the market prices. Market Power can cause inefficiency because it keeps the price and quantity away from the equilibrium of supply and demand. Externalities- The impact of one person’s actions on the well-being of a bystander. Since buyers and sellers do not consider these side effects when deciding how much to consume
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policy 2 2.2. Expansionary Fiscal policy – indication of a budget deficit? 2 2.3. Contractionary Fiscal policy – indication of a budget surplus? 3 3. Expansionary and Contractionary Fiscal policy in Australia 3 4. Failure to predict the budget in 2012 – 2013 of the Labour Party 4 5. Fiscal policy in Australia between 2006 – 2013 5 6. Conclusion 6 References 7 1. Introduction The economy is relatively influenced by the government intervention. The use of government revenue collection and government
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THE ETHICS OF PRICE GOUGING Matt Zwolinski Abstract: Price gouging occurs when‚ in the wake of an emergency‚ sellers of a certain necessary goods sharply raise their prices beyond the level needed to cover increased costs. Most people think that price gouging is immoral‚ and most states have laws rendering the practice a civil or criminal offense. The purpose of this paper is to explore some of the philosophic issues surrounding price gouging‚ and to argue that the common moral condemnation
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(i) What is meant by ’cross-price elasticity of demand’? It is a measure of the responsiveness of demand for a good to a change in the price of another good. This good can either be a substitute good or complementary good. (ii) Comment on the cross-price elasticity of demand between platinum and gold. When the price of platinum rises demand for gold rises. Because gold can be a substitute for platinum people will want to buy gold more when the price of platinum increases. (b)
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What is the formula for measuring price elasticity of demand? Percentage change in quantity demanded / Percentage change in price When the price elasticity coefficient is less than 1‚ the percentage change in quantity demanded is smaller than the change in price. When the price elasticity coefficient is equal to 1‚ the percentage change in quantity demanded is equal to the change in price. When the price elasticity coefficient is greater than 1‚ the percentage change in quantity demanded
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Price fixing assignment: 1. Why is price fixing an offense? Price fixing my cause market failures and distortions as it harms competition in a free market. This in turn adversely affects economic efficiency and consumer welfare. In India‚ price fixing and other such activities that have an adverse effect on competition are offense under Competition Act‚2002. In US‚ price fixing can be prosecuted as a criminal federal offense under section 1 of Sherman Antitrust Act. 2. What are the implications
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