Econ Answers Chapter 3 The price of train travel increases by 10% and the demand for train travel falls by 12.5%. The price elasticity of demand for train travel is – -1.25 The short run (retail) supply of freshly cut flowers is much less elastic than that of pot plants because: -florists cannot keep freshly cut flowers as long as pot plants If demand drops to zero at the slightest increase in price‚ demand is: - Perfectly elastic Price elasticity of supply will be greater when: - firms hold large
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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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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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Producer surplus is the difference between the minimum price the producer is willing to receive and what they actually receive. The surplus is their profit‚ and the larger the surplus‚ the greater their profit on the good. When it decreases‚ the producer receives a price closer to the minimum acceptable. The consumer surplus measures what the consumer is willing to pay and that price’s difference from the market price. The closer to the market price‚ the higher the consumer surplus‚ as consumers are
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UNIVERSITY OF HOUSTON – VICTORIA SCHOOL OF BUSINESS ADMINISTRATION ECON 6351 ECONOMICS FOR MANAGERS CASE STUDY THE WORLD COFFEE MARKET IN 2011-2012: WHAT FORCES DRIVE WORLD COFFEE PRICES? INSTRUCTOR: Dr. Vera Adamchik STUDENT: Olumide Joseph Ajayi I‚ Olumide Joseph Ajayi‚ hereby certify and warrant: (a) that this Individual Case Study is my original work; (b) that I have acknowledged all the sources used in this Case Study. I understand that copying of another’s work and representing
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subscriptions is optimal‚ and‚ at the current prices‚ the marginal revenue from the last subscription sold to a student is $6‚ while the marginal revenue from the last subscription sold to a regular customer is $10. In order to maximize profit‚ the magazine should a. stop offering students a discount on the regular subscription rate. b. offer students a higher discount (lower the price to students). *c. offer students a lower discount (raise the price to students). d. offer all customers the same
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market. i) The nature of the market and demand ii) Elasticity of demand iii) Competitor’s cost‚ price and offers iv) Inflation and deflation v) Interest rate vi) Reseller reaction vii) Social consideration viii) Government policies and regulation ix) Customer Expectation i) The nature of the market and demand - have knowledge about the relationship between market and demand Types of market a) Perfect competition - one
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EGT1 Task 2 A) Elasticity of Demand pertains to the relationship of price and need of a product. If a price increases will the demand increase or decrease? When a demand is elastic‚ it means even a small change in price can cause a large change in the quantities consumers purchase. (McConnell‚ pg. 77) So for example in an elastic demand if you reduce the price of a good the demand will increase a large amount and revenue then increases. When the is inelastic‚ according to McConnell it means when
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Consolidated‚ a privately owned wholesale and retail food distributor. SS is the smallest of three chains which caters to the South Central United States and is ranked either No. 1 or No. 2 in each of its markets. SS has been considering an ‘Everyday Low Prices’ strategy for many years. It is felt by due lower than expected sales based on budget targets‚ that revisiting the issue of a new pricing strategy is warranted. A management meeting is scheduled to discuss this matter and a decision is expected on
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| 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 suffering a loss—a result that cannot
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