predetermined that if she opens a restaurant in a suburban area of Los Angeles‚ then taste is the most important attribute‚ three times as important as location‚ and two times as important as price. Therefore‚ the total expected utility for a suburban restaurant can be described as: TEU = Taste(3) + Price(1.5) + Location(1) Now we need to plug in her ratings for attributes for both steak and pizza restaurants: TEU (Steak) = 80(3) + 65(1.5) + 55(1) = 240 + 97.5 + 55 = 392.5 TEU (Pizza) = 70(3) +
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Market Equilibration Process Paper ECO/561 David Mozinski Market Equilibration Process The laws of supply and demand seem to be a simple concept to understand. In the following paragraphs we will look at how one event in society can change the course of a product that seems to be in an equilibrium state‚ along with what happens when a product is in surplus or shortage. On December 14‚ 2012‚ a horrific event happened at Sandy Hooks Elementary School that took several lives. Who would
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increase in demand. When consumers look for a place to live the size of the home is crucial in their decision making as well of the economic conditions in the area. With the location‚ size and economic conditions all factoring into the decisions‚ the price of the apartments must be determined accordingly.
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1. Fukaku Footwear wished to estimate the demand function for its ‘Elite VS600’ women’s shoes. The company’s economist believed that the main determinants of ‘Elite VS600’ shoes are: i) ii) iii) iv) the price of the shoes (Px) the price of a competitor’s shoes Dr. Martin (Py) the price of another competitor’s shoes ‘Madame69’ (Pz) and disposable per capita income (Y) A regression was run by using SPSS package and the result is shown as follows: LS//Dependent Variable is Qx Variable Coefficient
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the equilibrium price is $50 per chip. If the current price is $55 per chip‚ then there will be (B.) a surplus of memory chips. Review #8. Suppose that the government establishes a price ceiling of $3.70 for wheat. What might prompt the government to establish this price ceiling? Explain carefully the main effects. Demonstrate answer graphically. Next‚ suppose the government establishes a price floor of $4.60 for wheat. What will be the main effects of this price floor. Demonstrate answer
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aluminum prices are at relative historic low today‚ we recommend that Alusaf go ahead with plans to construct the Hillside smelter plant. Based on the following analyses‚ we project the price of aluminum to rise to approximately $1‚590 per ton in 5 years. This price exceeds the minimum required level of $1‚416 per ton to yield Alusaf a positive net present value (NPV) on its initial plant investment of $1.6 billion. Analysis of Hillside plant profitability At a minimum market price of $1‚416
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marks) A buffer stock scheme is when the government seek to stabilise the market price of agricultural products e.g. purchasing supplies when the harvests are plentiful and selling stock when supplies are low. As stated in the study‚ the price of natural rubber has increased as a result of “responding to a combination of demand and supply factors”. The introduction of this scheme can help smoothen the fluctuation in prices‚ but the use of the scheme has benefits and drawbacks can affect whether the scheme
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Can The Roxy price discriminate between students and the general public? (c) Suppose that The Roxy keeps its prices intact. What would be the demand for tickets? (d) Given your answer to (c)‚ do you believe the Roxy should change its prices‚ and if so should it raise prices or lower them? Explain your answer. (e) Is it a good idea for The Roxy to set prices such that there will be excess demand for seats? Why or why not? (f) Assume that in 1995‚ the prices that The Roxy
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PROBLEM 1 Max has the utility function U(x‚ y) = x(y + 1). The price of x is $2 and the price of y is $1. Income is $10. How much x does Max demand? How much y? If his income doubles and prices stay unchanged‚ will Max’s demand for both goods double? To set his MRS equal to the price ratio‚ Max sets (y+1)/x = 2. His budget constraint is 2x + y = 10. Solve these two equations to find that x=11/4 and y=9/2. If his income doubles and prices stay unchanged‚ his demand for both goods does not double. A
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introduced a new music device called the J-Pod. The J-Pod is sold through Good Buy‚ a major electronics retailer. Good Buy has estimated that demand for J-Pod will depend on final retail price p according to the demand curve Demand D = 2‚000‚000 – 2‚000p The production cost of the Orange is $100 per J-Pod. (a) What wholesale price should Orange charge for the
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