1.Illustrate a situation when the producer of a good will have a greater tax incidence than a consumer. What does elasticity have to do with tax incidence?
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- Explain why using the midpoint formula for calculating the elasticity of demand gives the same result whether price increases or decreases, but using the initial price and quantity instead of the average does not.Can you think of an industry (or product) with near infinite elasticity of supply in the short term? That is, what is an industry that could increase Qs almost without limit in response to an increase in the price?The Stopdecay Company sells an electric toothbrush for $25. Its sales have averaged 8,000 units per month over the past year. Recently, its closest competitor, Decayfigh ter, reduced the price of its electric toothbrush from $35 to $30. As a result, Stopde cays sales declined by 1,500 units per month. What is the arc cross elasticity of demand between Stopdecays toothbrush and Decayfighters toothbrush? What does this indicate about the relationship between the two products? If Stopdecay knows that the arc price elasticity of demand for its toothbrush is 1.5, what price would Stopdecay have to charge to sell the same number of units as it did before the Decayfighter price cut? Assume that Decayfighter holds the price of its toothbrush constant at $30. What is Stopdecays average monthly total revenue from the sale of electric toothbrushes before and after the price change determined in part (b)? Is the result in part (c) necessarily desirable? What other factors would have to be taken into consideration?
- (Categories of Price Elasticity of Demand) For each of the following absolute values of price elasticity of demand, indicate whether demand is elastic, inelastic, perfectly elastic, perfectly inelastic, or unit elastic. In addition, determine what would happen to total revenue if a firm raised its price in each elasticity range identified. Absolut Value Elasticity Effect of Price Increase a b c dTransatlantic air travel in business class has an estimated elasticity of demand of 0.62, while transatlantic air travel in economy class has an estimated price elasticity of 0.12. Why do you think this is the case?An airline company currently sells a package deal for a $100 return ticket and sells 5000 tickets per week. Because of the high demand, the company raises its fare to $120 per ticket hoping to raise its revenue. If the price elasticity of demand is currently –1.2, what will be the sale of tickets per week and how will this affect total revenue? What conclu- sions do you draw from this exercise?
- I solve the demand functon as "Q = -16P + 192" However, I do not know how to maximize the total revenue and cannot explain it why by using theories related to the price elasticity of demand. Could you help me to answer this question? **I asked to Contact support, and they told me to ask this question here again. Thanks.Help please i will give the upvote: Thanks in advance The demand function for a particular commodity is y 15e -x/3 for Osxs8 where y is the price per unit and x is the number of units demanded. Determine the price and quantity for which the revenue is maximum?“A direct inducement that offers an extra value or incentive for the product to thesales force, distributors, or the ultimate consumer with the primary objective of creatingan immediate sale. As an intellectual and dynamic marketer of Singer BangladeshLimited, explain with appropriate examples, what promotional tools you will throw topromote your Television in the rural areas of Bangladesh and how?
- ANSWER B Total Revenue and Elasticity of Demand. In the following cases, determine how price changes would affect thetotal revenues of a firm by calculating theD and the resulting TRs for the respective commodities:a. Case 1. A few years ago, the LRT was increased from P8 to P10. As a result, the number of passengersregularly riding it decreased by approximately 5% from the previous daily estimate of 100,000. Whatcan you say about theD for LRT? Did daily revenues increase or decrease for the duration of thehike in LRT fare?b. Case 2. There was a year when toll gate has been moved from Alabang to Susana Heights and at thesame time, the fee was reduced from P7.75 to P5.50 (specifically for Canlubang – Susana Exit).Suppose the number of motorists then plying the South Expressway increased from 5,000 to 10,000per day as a result of the lower toll fee, did the increase in the number of motorists using theexpressway compensate for the reduction in the toll fee? Why or why not?If the price minute of JAWWAL- Oreedo is ILS 0.65 , and ATPU (Average traffic per user)is 55 minutes. Suppose that JAWWAL made 30% discount on minute price duringRamadan:a) Calculate the price elasticity of demand on JAWWAL service, if ATPU rises to 85 minutesdue to this offer, interpret your answer.b) Based on your answer in (a ) is the demand on JAWWAL service elastic, inelastic, orunit elastic.c) What do you advice Jawwal , is it profitable for JAWWAL to make the same offer gain,explain your answer.Taiwan is a major world supplier of semiconductor chips. A recent earthquake severely damagedthe production facilities of Taiwanese chip-producing companies, sharply reducing the amount of chipsthey could produce.a. Assume that the total revenue of a typical non-Taiwanese chip manufacturer rises due to theseevents. In terms of an elasticity, what must be true for this to happen? Illustrate the change in totalrevenue with a diagram, indicating the price effect and the quantity effect of the Taiwan earthquake onthis company’s total revenue.b. Now assume that the total revenue of a typical non-Taiwanese chip manufacturer falls due to theseevents. In terms of an elasticity, what must be true for this to happen? Illustrate the change in totalrevenue with a diagram, indicating the price effect and the quantity effect of the Taiwan earthquake onthis company’s total revenue.
