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- Benny used to sell rubber boots at R125 per pair. At this price he was able to sell 50 pairs of boots per day. When he increases the price to R140 per pair, his sales decrease to 42 pairs per day. Use the point method to calculate the elasticity of this product.QUESTION 7 28 C 24 20 16 12 8 4 0 4 8 O a) 1 Ob)-3 Oc)-11 Od) 17/3 O e) 2/11 Of)-2/21 Og) - 3/15.5 Oh)-3/1.5 12 16 20 E 07. Using the midpoint basis, and expressing the answer in fraction or integer format, calculate the elasticity statistic for the responsiveness of E to C changing from 2 to 6P & A Ch 05 Q10 Consider public policy aimed at smoking. Studies indicate that the price elasticity of demand for cigarettes is about 0.2. If a pack of cigarettes currently costs $5 and the government wants to reduce smoking by 10%, it should increase the price by ? %. If the government permanently increases the price of cigarettes, the effect on smoking 1 year from now will be ( larger / smaller ) than the effect 3 months from now. Studies also find that teenagers have a higher price elasticity of demand than do adults. Which of the following statements are consistent with this result? Check all that apply. Adults are more likely to be addicted to cigarettes. Teenagers do not have as much income as adults, so they are more price sensitive. It is legal for adults to consume alcohol, so many choose to spend their money on that good rather than cigarettes.
- The price for cigarettes sold by Big Tobacco Co Ltd was6.00 per packet in March 2018. During the month of March, the consumption of cigarettes was 1000 packets. However, the Board of Directors of Big Tobacco Co Ltddecided to increase the price by 25% during the month of April. As a manager you noted that price elasticity of demand was 0.8. As a manager Big Tobacco Co Ltd: A. Advise your management of the strategy that could be adopted by your firm to maintain sales. B. Also, advise your government on recommendedinterventions in the cigarette market.Discuss how knowledge of price elasticity of demand might be of practical use to a firm selling holiday tours in an island like Mauritius in a period of falling income (low economic situation) following the exposure of COVID-19.3.1 Distinguish amongst the main categories of elasticity. Include in your answer the provision of their formular.
- Koeler et al. (2004) estimate that the U.S. Tobacco Settiement between major tobacco companies and 46 states caused the price of cigarettes to jump by 45e per pack (21%) and overall per capita cigarete consumption to fal by 8.3%. What is the elasticity of demand for cigarettes? The price elasticity of demand for digaretes (e) is (Enter a numeric response using a real number rounded to three decimal places)Homework (Ch 05) Consider the market for soybeans. The following graph shows the weekly demand for soybeans and the weekly supply of soybeans. Suppose new farming technology is developed that enables growers to produce more crops with the same resources. Show the effect this shock has on the market for soybeans by shifting the demand curve, supply curve, or both. Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps back to its original position, just drag it a little farther. 30 Demand 24 Supply Supply 67°F Sunny PRICE (Dollars per bushel) Demand Q OConsider the market for corn. The following graph shows the weekly demand for corn and the weekly supply of corn. Suppose a spell of unusually good weather occurs, which enables corn producers to generate more corn per acre of land. Show the effect this shock has on the market for corn by shifting the demand curve, supply curve, or both. Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps back to its original position, just drag it a little farther. 20 Supply Demand 16 Supply Demand 10 20 30 40 50 QUANTITY (Millions of bushels) PRICE (Dollars per bushel)
- The price for cigarettes sold by Big Tobacco Co Ltd was6.00 per packet in March 2018. During the month of March, the consumption of cigarettes was 1000 packets. However, the Board of Directors of Big Tobacco Co Ltd decided to increase the price by 25% during the month of April. As a manager, you noted that the price elasticity of demand was 0.8. As a manager of Big Tobacco Co Ltd: Advise your management of the strategy that could be adopted by your firm to maintain sales. Also, advise your government on recommended interventions in the cigarette market.Chelsea Izkowski owns a fast food restaurant named Mickey Doodle's Burgers. Sherecently took a course in managerial economics and is eager to apply her knowledge tothe management of her business. She decides to estimate the price elasticity (EP) andincome elasticity (EI) of demand for DoodleBurgers and the cross-price elasticity (EDF) ofdemand for DoodleBurgers with respect to the price of FiddleBurgers, her chiefcompetitor. In order to estimate these elasticities, she collects the information that islisted in the table below, where Q is the quantity of DoodleBurgers sold in a week, PD isthe price of a DoodleBurger during the week, I is per capita annual income, and PF is theprice of a FiddleBurger during the week. Use this information to calculate the arc price,income, and cross-price elasticities of demand for DoodleBurgers.Q 1,000 1,100 983 831PD $1.20 $1.20 $1.20 $1.40I $10,000 $10,000 $11,000 $10,000PF $1.00 $1.10 $1.00 $1.00Revnol, a manufacturer of cosmetics, prices its popular pink lipstick at $8. On the basis of test-marketing, Revnol believes that women between the ages of 18 and 20 have an own-price elasticity of –1.0 and that 60 percent of them are likely to purchase the product. In the age group from 21 to 25 years, the own-price elasticity is –1.2 and 50 percent of them are likely to buy. (i) In a market with 25,000 women aged 18 to 20, and 15,000 aged 21 to 25, how many lipsticks can the firm expect to sell at a price of $8 per unit? (ii) If Revnol were to cut prices by 10 percent, approximately how many more pink lipsticks would it expect to sell?