Demand for Orange Juice is given as Qd = 5000 – 2500 P + 1200 I + 650 E – 255 Ps Suppose Income is I = Rs.500, Expectations E = 55, and Price of Ps = Rs 25. Find the Demand Equation. Using the demand function from part a., Calculate Elasticity of Demand for price range of Rs.125 and Rs.155. C.What will be the ‘Price Elasticity of Demand’ at P = Rs.125?
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Demand for Orange Juice is given as
Qd = 5000 – 2500 P + 1200 I + 650 E – 255 Ps
Suppose Income is I = Rs.500, Expectations E = 55, and Price of Ps = Rs 25.
- Find the Demand Equation.
- Using the demand function from part a.,
Calculate Elasticity of Demand for price range of Rs.125 and Rs.155.
C.What will be the ‘
D.Interpret the Elasticity of Demand calculated in (C) above
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- Demand for Orange Juice is given as Qd = 5000 – 2500 P + 1200 I + 650E – 255 Ps Suppose Income is I = Rs.500, Expectations E = 55, and Price of Ps = Rs 25. Find the Demand Equation. Using the demand function from part a., Calculate Elasticity of Demand for price range of Rs.125 and Rs.155. What will be the ‘Price Elasticity of Demand’ at P = Rs.125? Interpret the Elasticity of Demand calculated in (C) above.Demand for Orange Juice is given as Qd = 5000 – 2500 P+ 1200 I+ 650 E- 255 Ps Suppose Income isl = Rs.500, Expectations E = 55, and Price of Ps = Rs 25. a. Find the Demand Equation. b. Using the demand function from part a., Calculate Elasticity of Demand for price range of Rs.125 and Rs.155. c. What will be the 'Price Elasticity of Demand' at P = Rs.125? d. Interpret the Elasticity of Demand calculated in (C) above.Use the price-demand equationp+0.001x=45, 0sps45. Find the elasticity of demand whenp%3$25. If the $25 price is decreased by 4%, what is the approximate percentage change in demand? The elasticity of demand whenp%3 25 is (Type an integer or a simplified fraction.) If the price is decreased by 4%, the demand approximately %. (Type an integer or a simplified fraction.) is increases by decreases by
- Demand for Orange Juice is given as Qd = 5000-2500 P + 1200 I +650E - 255 PS Suppose Income is I = Rs.500, Expectations E = 55, and Price of Ps= Rs 25. Find the Demand Equation. b. Using the demand function from part a., Calculate Elasticity of Demand for price range of Rs.125 and Rs. 155. What will be the 'Price Elasticity of Demand at P = Rs.125? d Interpret the Elasticity of Demand calculated in (C) above.Q 2. (A) The monthly supply of desktop personal computers is given by the equation QS = 15,000 + 43.75P. At a price of $800, what is the price elasticity of supply? Q 2. (В) The British Automobile Company is introducing a brand new model called the "London Special." Using the latest forecasting techniques, BAC economists have developed the following demand function for the "London Special": Qр 3 1,200,000- 40P a) What is the point price elasticity of demand at prices of (a) $8,000 and (b) $10,000? b) Is it Elastic, Unit Elastic or Inelastic, Explain why?(A) The monthly supply of desktop personal computers is given by the equation QS = 15,000 + 43.75P. At a price of $800, what is the price elasticity of supply? Q 2. (B) The British Automobile Company is introducing a brand new model called the "London Special." Using the latest forecasting techniques, BAC economists have developed the following demand function for the "London Special": QD = 1,200,000 - 40P a) What is the point price elasticity of demand at prices of (a) $8,000 and (b) $10,000? b) Is it Elastic, Unit Elastic or Inelastic, Explain why? (A) Phoenix Lumber Company uses the number of construction permits issued to help estimate demand (sales). The firm collected the following data on annual sales and number of construction permits issued in its market area: No. of Construction Sales Year Permits Issued (000) (1,000,000) 2003 6.50 10.30 2004 6.20 10.10 2005 6.60 10.50 2006 7.30 10.80 2007 7.80 11.20 2008 8.20 11.40 2009 8.30 11.30…
- MK Corp estimates that its demand function is as follows: Q = 400 - 12:5P + 25A + 14Y+ 10P* where Q is the quantity demanded per month, P is the product’s price (in Rs.), A is the firm’s advertising expenditure (in Rs.’000 per month), Y is per capita disposable income (in Rs’000), and P* is the price of AJ Corp. a. During the next five years, per capita disposable income is expected to increase by Rs. 5,000 and AJ is expected to increase its price by Rs 12. What effect will this have on the firm’s sales volume? b. If MK wants to change its price by enough to offset the above effects, by how much must it do so? c. Compare the profitability of maintaining sales volume by either changing price or changing advertising spending. d. If MK’s current price is $60 and it spends $10,000 per month on advertising, while per capita income is $25,000 and AJ’s price is $70, calculate the price elasticity of demand with the price change. e. What can be said about the effect of the above price change…Using a linear specification, you estimate your demand curve to equal Q=10-5P+20C+2A, where • Q = the quantity demanded of your product • P = the price of your product • C = college-ratio, which is the percentage of the local population that attends college. For instance, C=0.10 would indicate 10% of the local population attends a college. • A = digital advertising spend (in thousands of dollars) What is your demand elasticity with respect to the college-ratio when your price is $5, your digital advertising spend is $100,000 (i.e. A=100), and the college-ratio equals 0.25? a. εQ,C=0.0013 b. εQ,C=0.0263 c. εQ,C=20 d. εQ,C=15200Exercise : Following an increase in it's price, from 10$ to 12$, the demand for a good falls from 10500 to8100 units.What elasticity of demand would you estimate from these data? Calculate its value, first by using the general formula (for discrete changes), then by assuming a constantconstant elasticity of demand (log formula).Calculate the demand for p=9 (note q9 the quantity for p=9), using the general formula then in log of the elasticity calculated in Now, Knowing the value of the direct price elasticity of demand calculated previously, assuming constant costs andcosts and rivals not responding to your price cut, would you have recommended the price cut from 10 to 9?price cut from 10 to 9 ?
- According to studies undertaken by the U.S. department of agriculture, the price elasticity of demand for cigarettes is about +0.5. Suppose a major brokerage firm advised its clients to buy cigarette stock under the assumption that, if consumer income rise by 50 percent as expected over the next decade, cigarette sales would double. Based on the fundamental economic principles on income elasticity of demand, a reasonable reaction to this investment advice would be?Consider the supply function for a kind of computer, namely p=10+0,5q. Determine the arc elasticity if the price increases from R1200 to R3200 . a. |ϵ|=1 , the supply is unit elastic. The 1% change in supply is equal to 1% change in price. b. |ϵ|=1 , the supply is unit inelastic. The 1% change in supply is equal to 1% change in price. c. |ϵ|=<1 , the demand is inelastic at this price. 1% increase (or decrease) in price will cause a 0,3% decrease (or increase) in demand. d. |ϵ|=<1 , the demand is elastic at this price. 1% increase (or decrease) in price will cause a 0,3% decrease (or increase) in demand.For the following demand equation compute the elasticity of demand and determine whether the demand is elastic, unitary, or inelastic at the indicated price. (Round your answer to three decimal places.) р+ 30; р%3D11 E(11) = ---Select--- v