4rth largest Truck manufacturer‚ launched the cheapest car in the world ‚ TATA NANO. At the time of inception ‚ the estimated purchase price for consumers was Rs.100‚000(Indian) but a few years down the line ‚ the prices of raw materials increased by 23% and the car price raised substantially. However the fixed prices in India are as follows; PRICE Base Model Rs.135151 TATA NANO CX Rs.164481 TATA NANO LX Rs.181498 MARKET SEGMENTATION: Tata Nano
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Course/Yr/Section: ________________ Score: ____________ I. IDENTIFICATION Identify the terms being defined and afterwards‚ write the term on the space provided opposite each number. ________________ 1. the varying reactions of the buyers to changes in price of goods and services ________________ 2. a curve which shows different combinations of two goods which yield the same level of satisfaction ________________ 3. It determines the allocation of goods and services among the members of society
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CHAPTER 6| Elasticity: The Responsiveness of Demand and Supply SOLUTIONS TO END-OF-CHAPTER EXERCISES Answers to Thinking Critically Questions 1. Even if the overall demand for gasoline is inelastic‚ a revenue increase for Joe’s Gas-and-Go will occur only if the percentage increase in price is greater than the percentage decrease in quantity demanded. If Joe’s price increase is too large and Joe has other competitors who do not raise their prices‚ then it is possible that the percentage
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companies control the entire market. These firms are in a highly concentrated industry. Oligopolies can result from various forms of collusion which reduce competition and lead to higher costs for consumers. Once a company in an oligopoly changes price or strategy both profit and other companies are impacted. In other words‚ the companies in this industry will change at the same time‚ especially facing a challenge. In their current market position‚ Kodak retains the highest market share. Kodak receives
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What is the Elasticity of Demand? * Price elasticity of demand describes how much a change in price will affect the level of demand for a certain product or service. If a certain good or service has high price elasticity‚ demand will tend to fall quickly if the price of the good or service increases and demand will increase quickly if the price of the good or service falls. On the other hand‚ for goods and services with low price elasticity‚ an increase in price will cause a relatively small
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Tutorial (Week 4) Question 1 Price Qty Demanded (Income = RM4‚000) Qty Demanded (Income= RM5‚000) 5 20 25 8 16 22 11 12 19 14 8 16 17 4 13 a. Use the midpoint method to calculate your price elasticity of demand as the price of T-shirt increases from RM5 to RM8 if (i) Your income RM4‚000 (ii) Your income RM5‚000 b. Calculate your income elasticity of demand as your income rises from RM4‚000 to RM5‚000 if (i) The price is RM14 (ii) The price is RM17 Question 2 Consider public policy aimed at smoking
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determined by a. multiplying the price of a product by the product. b. measuring the elasticity of a quantity demanded. c. dividing the price of the product by demand. d. dividing the demand for the product by its price. ____ 2. The relationship between the change in price and total revenue for an elastic demand curve is a. variable. c. inverse. b. unit elastic. d. direct. ____ 3. All of the following are determinants of demand elasticity EXCEPT a. whether the purchase of
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Purpose of assignment is to study the reasons for increase in price of egg over the period. Egg price at markets may be affected by many factors related to demand and supply. Article says that the main cause for the price increase attributed to increases in price of inputs‚ especially in feed prices. In order to elaborate the topic‚ economic models/concepts such as price elasticity of demand‚ income elasticity of demand and cross elasticity of demand are being used. These models will give a clear explanation
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2012 Abstract This paper is an econometric approach to the estimation of price and income elasticities of gasoline demand in the United States from a translog model‚ and is based off of the most recent data available for use. This approach allows for variables to interact in a flexible yet instrumental way‚ providing for significant evidence that gasoline demand elasticities are construed by the income effect and price effect. In the linear model the variables are more easily defined and effects
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Differentiated | No | Downward Sloping | MR = MC | Oligopoly | Few | Homogenous or Differentiated | Yes | Downward Sloping | MR = MC | The natural monopoly may be regulated through price‚ profit‚ or output regulation. Price regulation — Marginal cost pricing is one form of price regulation‚ where the monopolist’s price is set equal to marginal cost at the quantity of output at which demand intersects marginal cost. The problem with marginal-cost pricing is that it usually results in the monopolist
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