Suppose the makers of PEZ candies have decided to test market a new dispenser with red, white, and blue candies. The PREZ dispenser (as it will be called in 2024) bearing the likeness of each political party's presidential candy-date is estimated to have a market demand given by: 5Q = 3000 - 200p where p is expressed in dollars per dispenser and Q is expressed in thousands of dispensers sold per week. a. If p = $6 per PREZ dispenser, how many PREZ dispensers will be sold that week? Less than a thousand?

Suppose the makers of PEZ candies have decided to test market a new dispenser with red, white, and blue candies. The PREZ dispenser (as it will be called in 2024) bearing the likeness of each political party's presidential candy-date is estimated to have a market demand given by: 5Q = 3000 - 200p where p is expressed in dollars per dispenser and Q is expressed in thousands of dispensers sold per week. a. If p = $6 per PREZ dispenser, how many PREZ dispensers will be sold that week? Less than a thousand?

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter5: Elasticity Of Demand And Supply

Section: Chapter Questions

Problem 1.1P: (Calculating Price Elasticity of Demand) Suppose that 50 units of a good are demanded at a price of...

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Suppose that the makers of PEZ candies have decided to test market a new dispenser with red, white, and blue candies. The PREZ dispenser (as it will be called in 2024) bearing the likeness of the leading presidential candy-dates is estimated to have a market demand given by: 750 Q = 48000 - 6000 p where p is expressed in dollars per dispenser and Q is expressed in thousands of dispensers sold. a. Ifp is equal to 5 dollars per dispenser, how many PREZ dispensers will be demanded at that price? {Hint: Recall that Q is expressed in thousands.} b. Ifp is equal to 5 dollars per dispenser, what will be the price elasticity of demand for PREZ dispensers? PLEZ show your work. c. If the price rises from $5 to $5.50, will total revenue rise or fall? And by how much? Please express your answer in dollars, not thousands of dollars. d. If the objective is to maximize revenue, how much would you recommend the company charge per PREZ dispenser?
Using the data in the table below, estimate the demand function for cod. Price, dollars per pound 1.90 1.35 1.25 1.20 0.95 0.85 0.73 Using the Excel trendline option to estimate a linear demand function, the linear demand function is Q = 12.53-6.25p. Suppose the quantity in the first row of the table were 2 instead of 1.5. The linear demand function would now be Suppose the quantity in the second row of the table were 3.2 instead of 2.2. The linear demand function would now be Quantity, thousand pounds per day 1.5 Q= - SNES67 524 5 Q= -p. (Enter your responses rounded to two decimal places.) 2.2 4.4 5.9 6.5 7.0 8.8 p. (Enter your responses rounded to two decimal places.)
Price, dollars per pound Quantity, thousand pounds per day 1.90 1.5 1.35 2.2 1.25 4.4 1.20 5.9 0.95 6.5 0.85 7.0 0.73 8.8 Using the Excel trendline option to estimate a linear demand function, the linear demand function is Q = 12.53 – 6.25p. Suppose the quantity in the first row of the table were 3 instead of 1.5. The linear demand function would now be Q =]-p. (Enter your responses rounded to two decimal places.) Suppose the quantity in the second row of the table were 3.2 instead of 2.2. The linear demand function would now be Q =- p. (Enter your responses rounded to two decimal places.) Enter your answer in each of the answer boxes. JUL 11 MacBook Pro
The estimated monthly sales of Mona Lisa paint-by-number sets is given by the formula q = 105eP - 3p/2, where q is the demand in monthly sales and p is the retail price in hundreds of yen. (a) Determine the price elasticity of demand E when the retail price is set at ¥300. E = 24 Interpret your answer. The demand is going down v by 24 % per 1% increase in price at that price level. Thus, a large price decrease v is advised. (b) At what price will revenue be a maximum? (Round your answer to the nearest integer.) yen (c) Approximately how many paint-by-number sets willI be sold per month at the price in part (b)? (Round your answer to the nearest integer.) paint-by-number sets per month
Bubble tea is one of Malaysia's most popular beverages, especially among young working adults and students. With demand currently on a downward turn due to the effects of national Covid-19 measures, it was not long ago a huge craze that began sweeping Malaysians in 2018, resulting in an explosion of bubble tea shops and franchises across the country. In early 2020, the demand for a cup of Bubble Tea in Malaysia is given by the equation Qd = 500,000 - 45,000P. At a price of $5.00 per cup (USD price), what is the price elasticity of demand PED? O a. -0.818 O b. 1.10 O c. 0.818 O d. -1.10
The estimated monthly sales of Mona Lisa paint-by-number sets is given by the formula q = 97e° -3p²/2, where q is the demand in monthly sales and p is the retail price in hundreds of yen. (a) Determine the price elasticity of demand E when the retail price is set at ¥ 400. E = X Interpret your answer. The demand is going down ✔✔✔ by X% per 1% increase in price at that price level. Thus, large price decrease ✓ (b) At what price will revenue be a maximum? (Round your answer to the nearest integer.) X yen (c) Approximately how many paint-by-number sets will be sold per month at the price in part (b)? (Round your answer to the nearest integer.) paint-by-number sets per month is advised.
The following estimates have been obtained for the market demand for cereal In Q= 9.01- 0.68 In P+0.75In A-1.3M, where Q is the quantity of cereal,P is the price of cereal,A is the level of adverstising, and M is income. Based on this information,determine the effect on the consumption of cereal of : a: A 5 percent reduction in the price of cereal. b: A 4 percent increase in income. c: A 20 percent reduction in cereal advertising.
The demand equation for a certain brand of pencil is 100y? + 9t2 = 3600 where (y) represents the number (in thousands) of ten-packs demanded each week when the unit price is $(t). How fast is the quantity demanded increasing when the unit price per ten-pack is $14 and the selling price is dropping at the rate of $0.15 per ten-pack per week?
When the U.S. government announced that a domestic mad cow was found in December 2003, analystsestimated that domestic supplies would increase inthe short run by 10.4% as many other countriesbarred U.S. beef. An estimate of the price elasticity of beef demand is (Henderson, 2003).Assuming that only the domestic supply curveshifted, how much would you expect the price tochange? (Hint: See the discussion of price flexibilityin the application “The Big Freeze.”)
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
Apparel manufacturer Nike produces high-end and low-end versions of their running shirts. They estimate that the demands for their products are given by: High-end shirts: P = 130 - 2QH , andLow-end shirts: P = 80 - QL, where Q is measured in 1000 shirts, "H" denotes High-end and "L" denotes Low-end Both types of shirts are produced on the same production line in the same facility, so the marginal cost of producing and selling both types of shirts is constant at $30. Supposing that (i) the two demands are independent and (ii) Nike can produce and market the shirts such that the high- and low-end markets are successfully segmented, what are the profit-maximizing prices Nike would charge for each version?Answer Options:a) by the midpoint rule, PH = $65 and Pl = $40b) PH = $80 and PL = $55c) Nike will set price equal to marginal cost for both versionsd) PH = $130 and PL = $80
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…