Written Assignment (Note: All numbers will be round up to 3 decimal places) a) The estimated of the elasticity of demand is -2.040‚ indicating that the demand for movie ticket is inelastic. Since the p-value (0.000) is less than‚ we can conclude that at 5% significance level‚ the price (which is the estimation of elasticity of demand) coefficient is not zero and that the elasticity of demand will lies between -2.689 and -1.391. b) The value of is 0.354 meaning that the regression model accounts
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we must understand the meaning of elasticity. Elasticity or price elasticity is a measure of quantity demand responded when price is changed‚ that is‚ it a measure of responsiveness of the consumer due to price change. It is measured as the ratio of the percentage change in the quantity demanded and percentage change in price. If the elasticity of demand is greater than one‚ we say that demand is elastics‚ if it is less than one‚ we say that demand is inelastic‚ if
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AK/ADMS 4541 Advanced Corporate Finance Winter 2013 Mid-Term Exam Answer Key Question 1 (35 marks) a.) b.) (8 marks) (4 marks) Calculating the EOQ. EOQ = SQRT(2 * F * T / H) = (2 * 80 * 200‚000 / 1.00)0.5 EOQ = 5‚656.85 kg (4 marks) Calculating the EOQ savings. Total cost = (F * T/Q) + (H * Q / 2) = (80 * 200‚000 / 10‚000) + (1.00 * 10‚000/2) Total Cost @10‚000 kg = $6‚600 Total Cost EOQ = (F * T / Q) + (H * Q / 2) where Q = 5‚656.85 kg = (80 * 200‚000 / 5‚656.85) + (1.00 * 5‚656.85 / 2) = $5‚656
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such as online auctions‚ such as eBay. Such firms’ demand curves are perfectly elastic. These markets are theorized to have an unlimited number of buyers and sellers. There are likewise no barriers to entry or exit. Monopolistic competition describes a marketplace offering differentiated products‚ and as such are not perfect substitutes. This is found in restaurants and other preference-driven goods. Such firms find a high elasticity of demand (in the long run)‚ likely excess profits in the short
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reserves (1) – recognition of position (1)‚ explanation of sources (2). (b) Suppose a country has a surplus on its current account. Explain how this may affect its exchange rate. [3] Fall in supply of domestic currency to buy imports (1)‚ rise in demand for
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Abstract: The beer industry in the United States is continually changing and therefore companies in this industry must be versatile. Their versatility comes in a variety of forms‚ from changing their product offering‚ to changing their strategic goals‚ and finally‚ recognizing opportunities and threats. This paper explores many aspects of the industry though the use of Porter’s five forces model. I will analyze the internal rivalry present in the industry‚ any buyer or supplier power that is present
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of another. A currency will appreciates when the demand for the currency is more that it supply. When a currency appreciates‚ the price of their goods and services will increase. This will then lead to higher price of exports and resulting in lower demand of exports. Thus export receipts fall. At the same time‚ the price of import goods and services will become expensive. This will lead to lower price of imports and resulting in higher demand of imports. Thus import payments increase. As a result
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pursuing a career as a doctor and on the best location to practice medicine. She got wind that I am currently taking a business course in economics and decided to e-mail me for information on the market for physicians in terms of supply and demand‚ elasticity‚ costs of production‚ pricing‚ and economic profit and loss. As a caring uncle‚ I definitely recognize the significance of choosing a career in medicine. I truly want Jenny to be armed with the most valuable and pertinent information on the
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PRICE DISCRIMINATION What is Price Discrimination; Price discrimination is a pricing tactic that charges consumers different prices for the same product or service. In other worlds‚ price discrimination exists‚ when identical product or service transacted at different prices from the same supplier. Price discrimination allows a company to earn higher profits than standard pricing because it allows firms to capture every last pence of revenue available from each of its customers. While perfect
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sacrificed to produce each additional unit of consumption goods. Question 4 (0.5/0.5) As shown in Exhibit 8-3‚ in order to maximise its profit‚ what price should GeneTech charge for it’s vaccine? a) $35 per dose Question 5 (0.5/0.5) A demand curve for the Steel Porcupines’ concert tickets would show the: a) Number of tickets that will be purchased at various prices Question 6 (0.5/0.5) A free ride is a person who: a) Receives benefits from someone else’s action but does
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