Over the last year your boss has noticed that it would be useful for your firm t
ID: 1178740 • Letter: O
Question
Over the last year your boss has noticed that it would be useful for your firm to understand how consumers behave when variables in the market change and how these changes affect the total revenue for your product. You have been asked to do an analysis for your product, Good A, by addressing the following questions and reporting the results to your boss in a formal paper.
Questions:
Figure 1: The Demand Schedule for Barbeque Dinners
Quantity Demanded
Total Revenue
Elasticity Coefficient
Elastic or Inelastic
$4
100
__________
XXXX
XXXX
6
80
__________
__________
__________
8
60
__________
__________
__________
10
40
__________
__________
__________
12
20
__________
__________
__________
14
1
__________
__________
__________
Price
Quantity Demanded
Total Revenue
Elasticity Coefficient
Elastic or Inelastic
$4
100
__________
XXXX
XXXX
6
80
__________
__________
__________
8
60
__________
__________
__________
10
40
__________
__________
__________
12
20
__________
__________
__________
14
1
__________
__________
__________
Explanation / Answer
. ans1 -it is the degree of responsiveness of the quantity demanded to the change in the price of a commodity.to the producers it provides the information regarding the effects of setting high price/ lower price for their product on the the sales of that product/profits from that product.
it is calculated by dividing,% change in quantity demanded by %change in price
ans - . ans1 -it is the degree of responsiveness of the quantity demanded to the change in income of the consumers.gennerally when the income of consumers goes up the demand for commodity goes up. it is calculated by dividing,% change in quantity demanded by % change in income.
Define the cross-price elasticity of demand? What information does it provide? How is it calculated?
ans- -it is the degree of responsiveness of the quantity demanded of one goodf to the changes in the price of another commodity which either its substitute or its complimentry good.
it is calculated by dividing,% change in quantity demanded of A good by %change in price of B good
Figure 1: The Demand Schedule for Barbeque Dinners
Quantity Demanded
Total Revenue
Elasticity Coefficient
Elastic or Inelastic
$4
100
___400_______
XXXX
XXXX
6
80
____480__
____-.4______
___relatively __inelastic____
8
60
____480______
__________
__________
10
40
____400______
__________
__________
12
20
_____240_____
__________
__________
14
1
_____14_____
__________
__________
Price
Quantity Demanded
Total Revenue
Elasticity Coefficient
Elastic or Inelastic
$4
100
___400_______
XXXX
XXXX
6
80
____480__
____-.4______
___relatively __inelastic____
8
60
____480______
__________
__________
10
40
____400______
__________
__________
12
20
_____240_____
__________
__________
14
1
_____14_____
__________
__________
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