Managerial Economics: A Problem Solving Approach
5th Edition
ISBN: 9781337106665
Author: Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 12, Problem 4MC
To determine
Acquiring complementary good.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
When the price of commodity C rises by 10%, the quantity demanded falls by 18%. This is an example of: (3)A. perfectly elastic demand.B. elastic demand.C. unitary elasticity of demand.D. inelastic demand.E. perfectly inelastic demand.
Q.1.11 When the price of commodity C rises by 10%, the quantity demanded falls by 18%. This is an example of:(a) perfectly elastic demand.(b) elastic demand.(c) unitary elasticity of demand.(d) inelastic demand.
The elasticity of Supply is an important concept in Microeconomics as it relates to a business's ability to adjust its production and its production facility in response to market developments. Think of some examples of products and businesses that would have various degrees of Elasticity of Supply and share them here.
For example, what would be the Elasticity of Supply for an original piece of art? What does this imply for the adjustment in this market to a change in Demand?
How would you describe the Elasticity of Supply for a product such as peaches, plums, and other tree fruit? Consider first a brief period, such as weeks, and next a much longer period such as five years. How does the time horizon influence market adjustment when there is a change in Demand?
Chapter 12 Solutions
Managerial Economics: A Problem Solving Approach
Knowledge Booster
Similar questions
- Discuss the scenarios below. Please treat each scenario separately. (i) You are the manager of a local restaurant. You notice that when you lower the price of your meals, your total revenue rises. What conclusion can you draw about the demand for your restaurant's meal? (ii) For a car manufacturing industry, why does the elasticity of supply generally increase as more time passes after a price change? (iii) Over 20 years period, tuition fees at a university have increased by 60%. At the same time, the number of students enrolled for the courses at the same university had increased from 20,000 to over 32,000. Based on the Law of demand, when a price of a product increases the demand for the same product will reduce. Based on the scenario of the university, do you think the law of demand is untrue? Please explain your conclusion using appropriate graphs.arrow_forwardStiller Explanation: Q4. a) Give your own example (think about your own tastes&preferences, i.e., you cannot use examples from the textbook) of a product that your demand is elastic. Assume that the price of this product rises. What happens to total revenue of the producer? Explain why. Product you choose: TR declines or increases: Explanation: b) Give your own example (think about your own tastes&preferences, i.e., you cannot use examples from the textbook) of a product that your demand is elastic. Assume that the price of this product rises. What happens to total revenue of the producer? Explain why. Product you choose: TR declines or increases: Explanation:arrow_forwardQ4. a) Give your own example (think about your own tastes&preferences, i.e., you cannot use examples from the textbook) of a product that your demand is elastic. Assume that the price of this product rises. What happens to total revenue of the producer? Explain why. Product you choose: TR declines or increases: Explanation: b) Give your own example (think about your own tastes&preferences, i.e., you cannot use examples from the textbook) of a product that your demand is inelastic. Assume that the price of this product rises. What happens to total revenue of the producer? Explain why. Product you choose TR declines or increases: Explanation:arrow_forward
- The supply of hamster breeders has increased because pet hamsters have become popular for families. Therefore, due to this change, the total revenues earned by hamster breeders will a. increase b. increase only if the demand curve is relatively elastic and decrease otherwise c. increase only if the supply curve is relatively elastic and decrease otherwise d. decrease only if the demand curve is relatively elastic and increase otherwisearrow_forwardsuppose the price elasticity of demand for heating oil is 0.2 in short run and 0.7 in long run a. if the price of heating oil rises from rs 1.80 to rs 2.20 per litre, what happens to the quantity of heating oil demanded in the short run? in the long run? use mid point method b. why might this elasticity depend on the time horizon?arrow_forwardDemand [ Select ] the longer the time frame. more inelastic more elastic Demand is (Select ] the more substitutes there are for a good. Supply is I Select ) v the harder it is to scale up production of a good.arrow_forward
- The number of products of a company is modeled by x = 200 - 2p^2, 0 less than or equal to 'p' less than or equal to 10 where p is the price per product (0 less than or equal to 'p' less than or equal to 10). a. Find the demand function, that is, express p in terms of x. b. Find the price elasticity of demand. c. Is the demand elastic or inelastic when x= 120 d. Is the demand elastic or inelastic when x= 160?arrow_forwardA movie production company faces a linear demand curve for its film and it seeks to maximize total revenue from the film’s production. At what level should the price be set? Is it where demand is elastic, inelastic, or unitary elastic? (with graph)arrow_forward2. Suppose the demand for a product is given by x = 30 − 2p. (a) Find the elasticity of demand and use that to find the price that maximizes revenue. (b) Now, let’s do the same thing a different way. Find the revenue functions in terms of the variable p. This will be a quadratic function. Find the p value of the maximum by finding the vertex of the parabola. (You should get the same p value as in part (a).arrow_forward
- Using the following table, organize the goods by indicating which you predict to have the most elastic demand, the least elastic demand, and the elasticity of demand that falls somewhere in between. Categories Shoes Adidas copa mundials Soccer cleats Most Elastic In Between Least Elastic The price elasticity of demand of a good is also impacted by the defined time horizon. All else equal, the demand for natural gas will tend to be elastic in the short run than in the long run. Grade It Now Save & Continue Continue without savingarrow_forwardXYZ Co. makes a processor that requires a metal that can be found in a single mine in Peru. Do you expect the price elasticity of supply for this processor to be elastic or inelastic? Explain your answer in approximately 1-4 sentences.arrow_forwardThere are 1000 consumers in the market of good A, each has an identical demand curve for this good. The price of one unit of good A is $P. At a given price the market demand is: A. More elastic than the individual demand curve B. less elastic than the individual demand curve C. as elastic as the individual demand curve D. depending on P, all above can happenarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Microeconomics: Principles & PolicyEconomicsISBN:9781337794992Author:William J. Baumol, Alan S. Blinder, John L. SolowPublisher:Cengage Learning
Microeconomics: Private and Public Choice (MindTa...EconomicsISBN:9781305506893Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
Economics: Private and Public Choice (MindTap Cou...EconomicsISBN:9781305506725Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
Microeconomics: Principles & Policy
Economics
ISBN:9781337794992
Author:William J. Baumol, Alan S. Blinder, John L. Solow
Publisher:Cengage Learning
Microeconomics: Private and Public Choice (MindTa...
Economics
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Economics: Private and Public Choice (MindTap Cou...
Economics
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning