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- Suppose that during the past year, the price of a laptop computer rose from $2,750 to $2,880. During the same time period, consumer sales decreased from 446,000 to 321,000 laptops. Original New Average Change Percentage Change Quantity -32.59% /-16.3%/-306.8% Price 4.62% /2.31%/2165.38% Step 1: Fill in the appropriate values for original quantity, new quantity, original price, and new price. Step 2: Calculate the average quantity by adding the original quantity and the new quantity, and then dividing by two. Do the same for the average price. Step 3: Calculate the change in quantity by subtracting the original quantity from the new quantity. Do the same for the change in price. Step 4: Calculate the percentage change in quantity demanded by dividing the change in quantity by the average quantity. Do the same to calculate the percentage change in price. Step 5: Calculate the price elasticity of demand…The manufacturer of Brand A automobile tires claims that its tire can save 110 gallons of fuel over 55,000 miles of driving, as compared to a popularcompetitor (Brand B). If gasoline costs $4.00 per gallon, how much per mile driven does this tire save the customer (Brand A versus Brand B)?US Auto Company would like to offer rebates to its customers in order to increase sales. If it lowers prices sales will increase. This will depend on the price elasticity of demand. Assume that the price elasticity of demand is 1.5. This firm is considering a $400 rebate on its cars. Also assume the following information on prices and costs before the rebates: Average price per car $9,000 per car Expected sales volume at $9,000) per car 1,000,000 cars Average total costs per car $8,200 per car Total variable cost $6,400,000,000 Calculate the present total fixed costs, average variable costs and average fixed costs. What is the present breakeven point? What is the change in revenue resulting from the $400 price reduction? What is the effect on the cost per car after the change? In other words what is the average cost per…
- 11- It is estimated that consumers will buy Q (p) 4,374 kg of imported beans per week when p2 the price is p$ per kg. It is estimated that t weeks from now, the price of this type of beans will be p(t) = 0.04t2 + 0.2t + 12 dollars per kg. a. Estimate the weekly consumer demand for the beans as a function of t. b. How many kg of beans will consumers buy 10 weeks from now?AD has estimated the following demand relationship for its product over the last four years, using monthly observations: ln Qt = 4.932- 1.238 ln Pt + 1.524 ln Yt-1 + 0.4865lnQt-1(2.54) (1.38) (3.65) (2.87)R2= 0.8738where Q = sales in units, P = price in Rs., Y is income in Rs,000, and the numbers in brackets are t-statistics.a. Interpret the above model.b. Make a sales forecast if price is Rs. 9, income last month was Rs. 25,000 and sales last month were 2,981 units.c. Make a sales forecast for the following month if there is no change in price or income.d. If price is increased by 5 per cent in general terms, estimate the effect on sales, stating any assumptions.A competitive industry has production processes that generate pollution. ok with studies carried out on the affected population, the marginal costs associated with contamination are constant and CU500. for each unit of the good produced. these costs are associated with lost workdays, illness treatment costs, and the nuisance generated in the population. Currently the production level of the industry is 250 units and the market price is 1,500 (MU/unit). Market studies carried out by companies estimate that if the price rises At 1,800 (mu/unit) the quantity demanded would fall to 200 units and the marginal cost of the production of each company in this new production level is 1,300 (m.u./unit). Assume linearity in market demand and in the marginal costs of production of the companies Graph to justify your answers. A)Determine the optimal production level from the perspective of the whole of the society. Show your result graphically.
- Exotic Metals, Inc., a leading manufacturer of beryllium, which is used in many electronic products, estimates the following demand schedule for its product:PRICE ($/POUND) QUANTITY (POUNDS/PERIOD)$25 018 1,00016 2,00014 3,00012 4,00010 5,0008 6,0006 7,0004 8,0002 9,000Fixed costs of manufacturing beryllium are $14,000 per period. The firm’s variable cost schedule is as follows:OUTPUT (POUNDS/PERIOD) VARIABLE COST (PER POUND)0…39. Which one is expected to be the larger amountIf the price of gas is less than $1 per gallon, how many gallons of gas would be supplied per week? $5 Price of gas ($ per $4 gallon) $3 $2 $1 $0 0 5 10 25 15 20 30 35 Quantity of gas supplied per week (millions of gallons) 40
- A competitive industry has production processes that generate pollution. okay with studies carried out on the affected population, the marginal costs associated with contamination are constant and 500 u.m. for each unit of the good produced. These costs are associated with lost working days, illness treatment costs and the nuisance generated in the population. Currently the production level of the industry is 250 units and the market price is 1500 (um/unit). Market studies carried out by the firms estimate that if the price rises at 1,800 (mu/unit) the quantity demanded would drop to 200 units and the marginal cost of production of each firm at this new production level is 1,300 (m.u./unit). assume linearity in market demand and in the marginal costs of production of the firms. Graph to justify your answers. b)Graphically indicate and determine the magnitude of the social cost of the situation with a production level of 250 units.A competitive industry has production processes that generate pollution. okay with studies carried out on the affected population, the marginal costs associated with contamination are constant and 500 u.m. for each unit of the good produced. These costs are associated with lost working days, illness treatment costs and the nuisance generated in the population. Currently the production level of the industry is 250 units and the market price is 1500 (um/unit). Market studies carried out by the firms estimate that if the price rises at 1,800 (mu/unit) the quantity demanded would drop to 200 units and the marginal cost of production of each firm at this new production level is 1,300 (m.u./unit). assume linearity in market demand and in the marginal costs of production of the firms. Graph to justify your answers. )Determine the level of tax that would have to be applied to production to achieve the social optimum.Suppose that the manufacturer of a gas clothes dryer has found that when the unit price is p dollars, the revenue R (in dollars) is R(p) = -5p² + 10,000p. (a) At what prices p is revenue zero? (b) For what range of prices will revenue exceed $1,500,000? (a) At what prices p is revenue zero? The revenue equals zero when p is $ (Use a comma to separate answers, but do not use commas in any individual numbers.) (b) For what range of prices will revenue exceed $1,500,000? (Type your answer in interval notation. Round to the nearest cent as needed.).