Business Economics Case Number 6 Topic : Elasticity of Demand Objective: a) To apply the concept of elasticity of demand b) To correlate elasticity with decision making Part -I President Mr. Chatterjee of Indian Institute of Business Economics (IIBE)‚ India is concerned about the financial state of his institution. Last year there was a loss of Rs.1.5 million and the trustees are getting restless. Currently there are 1000 full-time students‚ out of that 700 are degree students from
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7-28-2013 ENC-220 Audra Sherwood Price Elasticity of Demand Analysis 1. Who is likely to be more affected by tax increases on cigarettes: all adults or young adults? Why? Cite elasticity of demand estimates from the article to support you answer. I think that all smokers are affected by any price increase in their brand of cigarette. But young adults are found to respond more to price change. Studies show that cigarette tax increase is the most effective way to achieve long-run
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Supply‚ Demand‚ and Elasticity Paper Edward Goodan ECO/212 Principles of Economics October 11‚ 2010 Juan Carlos Ginarte Supply‚ Demand‚ and Elasticity Paper Abstract A look at the cause for shift in the supply and demand of coffee. The shift in the supply and demand mean to equilibrium price and quantity will be answered. Furthermore‚ what can be used as a substitute for this luxury product. The paper will tell the impact of a substitute
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PRICE ELASCITIY OF DEMAND: There are several uses of Price Elasticity of Demand that is why firms gather information about the Price Elasticity of Demand of its products. A firm will know much more about its internal operations and product costs than it will about its external environment. Therefore‚ gathering data on how consumers respond to changes in price can help reduce risk and uncertainly. More specifically‚ knowledge of Price Elasticity of Demand can help the firm forecast its sales and
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CHAPTER 20 Supply and Demand: Elasticities and Government-set Prices A. Short-Answer‚ Essays‚ and Problems New 1. The president of a toy company asks you for advice about whether the company should cut the price of its best-selling doll this year based on the following information: last year the company cut the price of its best-selling doll by 10% and the total revenues from doll sales increased by 10%. New 2. The owner of a health club asks you for advice about whether the company
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society c. exists in unlimited quantities d. must be produced by a firm 2. Michigan has an abundant supply of fresh water. However‚ an economist would consider it a scarce resource because a. water is necessary for humans ’ physical survival b. pollution will eventually destroy all life in the Great Lakes c. water is limited relative to people ’s unlimited wants d. water commands a very high price 3. The difference between a good and a service is a. that goods help satisfy unlimited wants;
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Assignment Eco 101 1. a) Briefly explain the factors that determine the price elasticities of demand and supply. b) The accompanying table presents the prices and associated demand quantities of ready-made garments of Bangladesh at different world incomes. Price of RMG Quantity demanded when Quantity demanded when world GDP is $ 65 trillion world GDP is $ 70 trillion $10 500‚000 800
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Demand 10. The long-run price elasticity of demand for a product is generally _________ the short-run elasticity for the same product. A. lower than B. equal to C. higher than D. not comparable to 11. Assume the demand function for skin care products is given by Q = 1‚000 – 20 P + 5I. If P=$25 and I=$1‚000 currently‚ then: A. skin care products are a normal good. B. the elasticity of demand is equal to 11. C. skin care products are inferior. D. The price is too high 12. If the demand
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answer questions II 10 3 30 50 minutes Very short answer questions 10 1 10 15 minutes 2. Weightage by content Unit No Unit Sub-Units Marks 1 Introduction 4 2 Consumer Equilibrium and Demand 18 3 Producer Behaviour and Supply 18 4 Forms of Market and Price determination 10 6 National income and related aggregates 15 7 Money and Banking 8 8 Determination of Income and employment 12 9 Government Budget and the economy 8 10 Balance of Payment 7 Total 100 3. Difficulty level
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minutes 24 36 minutes 30 50 minutes 10 15 minutes Weightage by content Unit No 1 2 3 4 6 7 8 9 10 3. 6 6 10 10 Mark Unit Sub-Units Introduction Consumer Equilibrium and Demand Producer Behaviour and Supply Forms of Market and Price determination National income and related aggregates Money and Banking Determination of Income and employment Government Budget and the economy Balance of Payment Total Marks 4 18 18 10 15 8 12 8 7 100 Difficulty
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