(CHAPTER 4) 1. Using a sample of 100 consumers, a double-log regression model was used to estimate demand for gasoline. Standard errors of the coefficients appear in the parentheses below the coefficients. Ln Q = 2.45 -0.67 Ln P + . 45 Ln Y - .34 Ln Pcars (.20) (.10) (.25) Where Q is gallons demanded, P is price per gallon, Y is disposable income, and Pcars is a price index for cars. Based on this information, which is NOT correct? a.
Words: 1651 - Pages: 7
SUPPLY AND DEMAND The demand for the Disney Company is ever increasing based on the sales figures in 2014. Disney earned revenues of $40,246 million which represents an increase of 7% compared to 2013. The net income gained 8% to $8,004 million and the earnings per share for the year 2014 increased 8% to $4.31 (Disney Annual. Report, 2014). Disney’s profits amount to $5.6 billion with a market cap of $179.5 billion, making Disney an extremely valuable company. At the moment Disney has approximately
Words: 905 - Pages: 4
A manager must understand many factors to help a business increase revenue. One factor is that price times quantity yields total revenue for a product. Another relevant concept is that there are opportunity costs associated with any decision. Elasticity also affects revenues as managers change prices and quantities. Increasing Revenue OBJECTIVE: Choose methods to increase revenue in an organization. Resource: Ch. 1, 2, & 6 of Economics Content • Ch. 1: Limits, Alternatives,
Words: 376 - Pages: 2
1-) (Categories of Price Elasticity of Demand) For each of the following absolute values of price elasticity of demand, indicate whether demand is elastic, inelastic, perfectly elastic, perfectly inelastic, or unit elastic. In addition, determine what would happen to total revenue if a firm raised its price in each elasticity range identified. a) ED = 2.5:elastic b) ED = 0.8:inelastic 2-) (Price Elasticity of Supply) Calculate the price elasticity of supply for each of the following combinations
Words: 981 - Pages: 4
IUP Journal of Managerial Economics,November,2010,Vol. VIII,No. 4,pp.6-34 , Monika Jain,Paradox of Plenty,with Special Reference to Inelastic Demand for Apples,The IUP Journal of Managerial Economics,May,2011,Vol. IX,No. 2,pp.4455 , Cathy Locke Bee Staff Writer. The Sacramento Bee ,"EID report reveals household water use on rise An analysis of supply, demand recommends holding off on meters" http://search.proquest.com/docview/246565304?accountid=80692 , Yeung; Vincent Mok,Regional monopoly and interregional
Words: 3278 - Pages: 14
Will Bury’s Price Elasticity Scenarios Economics University of Phoenix The results of Will Bury’s investigations into the effect of price-changes on the demand, for unique online products, revealed that an increase in price translated to a large increase in demand. This suggests that products targeted at a niche-market face a price inelastic demand curve; a small change in price results in a high increase in demand. The reverse is true when there is a fall in the price of a
Words: 362 - Pages: 2
Scenario Concept Edric Vázquez Muñoz ECO/561PR October 7th, 2013 Prof. Carlos Mendez Scenario Concept Carlos Cruz Elasticity Scenario Analysis This paper analyzes the development of a product, supply and demand which has the same evaluating all angles from the viewpoint of an economist with the decision to start a business. Carlos Cruz is an inventor who is trying to create a new product that uses technology to make printed words such as books, materials and convert text into a digital product
Words: 1339 - Pages: 6
Microeconomics and the laws of supply demand ECO/365 Supply and Demand Simulation Since the early years of commerce, supply and demand have been a huge factor in the capitalist business system. For this assignment I was asked to take part in a simulation as a source for my paper. In the simulation I had to take part of a series of important financial decisions for a fictitious apartment management company named GoodLife and see how each decision would be impacted by different economic factors
Words: 574 - Pages: 3
Price Elasticity of Demand | | In this chapter we look at the idea of elasticity of demand, in other words, how sensitive is the demand for a product to a change in the product’s own price. You will find that elasticity of demand is perhaps one of the most important concepts to understand in your AS economics courseDefining elasticity of demandPed measures the responsiveness of demand for a product following a change in its own price. The formula for calculating the co-efficient of elasticity
Words: 2787 - Pages: 12
FE341: Microeconomics Homework 1 Due August 30 th ANSWER KEY Please indicate the students that you worked on this homework assignment with, if any. 1. From the textbook page 18: Questions for Review #2 Which of the following two statements involves positive economic analysis and which normative? How do the two kinds of analysis differ? a. Gasoline rationing (allocating to each individual a maximum amount of gasoline that can be purchased each year) is poor social policy because it interferes with
Words: 1466 - Pages: 6
