upply and demand curve for Tesla Model S electric cars is given in the figure below. The equilibrium price and quantity for this market are given by P and Q* respectively. Price p* Q* sexoni bratani - S D D Quantity 1. Subsequently, Porsche announces an all-electric sports car meant to rival the Tesla Model S. How would this affect the demand for Tesla Model S cars? Illustrate on the graph above.cl How will this change affect the equilibrium price and quantity (i.e. increase, decrease, or stay the same)? Illustrate the new equilibrium price and quantity on the graph above.

upply and demand curve for Tesla Model S electric cars is given in the figure below. The equilibrium price and quantity for this market are given by P and Q* respectively. Price p* Q* sexoni bratani - S D D Quantity 1. Subsequently, Porsche announces an all-electric sports car meant to rival the Tesla Model S. How would this affect the demand for Tesla Model S cars? Illustrate on the graph above.cl How will this change affect the equilibrium price and quantity (i.e. increase, decrease, or stay the same)? Illustrate the new equilibrium price and quantity on the graph above.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter3: Demand Analysis

Section: Chapter Questions

Problem 8E: The Stopdecay Company sells an electric toothbrush for $25. Its sales have averaged 8,000 units per...

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Evaluate the following statement: Along a downward-sloping linear demand curve, the slope and therefore the elasticity of demand are both 'constant.
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?
The diagram illustrates the demand for MQ2020, a luxury car manufactured by MQ Motors Which statement correctly describes the demand for MQ2020? 8,000 Price, P: WTP (5) 6,000 4,800 4,000 3,200 2,000 0 0 40 60 80 100 Quantity, Q: number of consumers per day 120 Select one O a. There are 99 consumers per day who are willing to pay money for MQ2020. O b. If MQ Motors sets the price at $4,800, there will be 60 consumers who are willing to buy MC22020 Oc MQ Motors will need to raise the price up to $8,000 in order to maximise its profit Od. There are 59 consumers who are willing to pay more than $4,800 for MQ2020. Oe. The demand curve shows that points A and C are feasible options for MQ Motors.
when Honda introduce the Acura to compete with European luxury cars, there was a danger that the new line would take sales away from Honda's Accord. To make Acura more competitive with other luxury cars, suppose Honda cuts the price of Acura while keeping the price of Accord unchanged. If Honda's fear cone true, will it find a negative cross-elasticity demand, negative income elasticity of demand, or positive cross-elasticity of demand?
Viking Publishing House observed that in the recent years books on nature conservation and climate change have been very popular. As a matter of fact, Jane Goodall's latest book, "The Book of Hope: A Survival Guide for an Endangered Planet" has been a best-seller and Viking estimates the following demand curve for the book: P= 150 -Q In this equation, P is the price of the book and Q denotes yearly sales in thousands of books. In other words, 20,000 books would be expressed as Q = 20. Viking estimates that it incurs a cost of $40 for printing and shipping of each book and pays a $10 royalty to Jane Goodall for each book sold. Calculate the profit-maximizing OUTPUT and PRICE for this book. Also, calculate the TOTAL а. PROFITS. Show all calculations. No calculations, no points. b. Viking's CEO, Mr. Brian Tart, receives a yearly bonus from the company based on the size of the total revenue generated by Jane Goodall's book. Mr. Tart believes that his bonus is going to be satisfactory only…
A news website reported (Feb. 17, 2020) that ridership of Karachi Metro Bus declined after a fare increase: “There were nearly four million fewer riders in December 2019, the first full month after the price of a token increased Rs. 25 to Rs.150, than in the previous December, a 4.3 percent decline.” i) Use these data to estimate the price elasticity of demand for Karachi Metro Bus. ii) According to your estimate, what happens to the Karachi Metro Bus’s revenue when the fare rises? iii) Why might your estimate of the elasticity be unreliable?
Rachel earns twice as much money as her sister Maya. Both sisters equally love taking trips to Disneyland. Suppose the ticket price of Disneyland rises from $140 to $180. Rachel decreases the number of times she goes to Disneyland by 20%. Maya's price elasticity of demand (in absolute value) for Disneyland trips will for sure be Selected answer will be automatically saved. For keyboard navigation, press up/down arrow keys to select an answer. b C d smaller than 1.25 larger than 1.25 smaller than 0.8 larger than 0.8
Explain the DEMAND FOR THREEOUNCE BOTTLES OF SPRING BREAK SUNTAN LOTION?
Suppose you are the managing director of a firm that produces two goods: A and B. The priceelasticity of demand for good A is 0.75 and for good B it is 2.5. The firm is experiencing seriouscash flow problems and you have to increase total revenue as soon as possible. If you were ina position to set the price for these two goods, what would be your pricing strategy for eachproduct?
1) Walkers’ Shoes reports the following demand schedule for its black brogues.Price 1600 800 400 200 100 50 25 12.5Quantity demanded 2 4 8 16 32 64 128 256a) For an increase in price from 50 to 100, calculate:i) The proportional change in price.ii) The proportional change in quantity demanded.iii) The price elasticity of demand for Walkers’ black brogues.b) Considering the demand schedule in the table, what do you conclude about the value of the price elasticity of demand for Walkers’ black brogues at every level of output? How would you classify the demand for such a good?c) What is the effect on Walkers Shoes’ total revenue of doubling the quantity of shoes which it supplies? What is the value of its marginal revenue? How does your answer relate to the value of the price elasticity of demand?d) The income elasticity of demand for Walkers’ Shoes is estimated to be 1.8. By how what percentage do you expect demand to increase if its customers’ incomes increase from 31,500 to 38,500?
Suppose a movie theater determines it can charge different prices to patrons who go to weekday matinees and people who attend evening and weekend shows. The movie theater's goal is to increase total revenue. See Hint The price elasticity of demand for weekend and evening patrons is -0.50, and the price elasticity of demand for matinee moviegoers is -2.80. Based on the price elasticity of demand for each group of people, how should the movie theater adjust its prices? Choose one: O A. Raise the price for matinee moviegoers, and keep the price the same for weekend and evening patrons. O B. Lower the price for matinee moviegoers, and raise the price for weekend and evening patrons. O C. Lower the price for matinee moviegoers, and keep the price the same for weekend and evening patrons. O D. Raise the price for matinee moviegoers, and lower the price for weekend and evening patrons.
A news website reported (Feb. 17, 2020) that ridership of Karachi Metro Bus declined after a fare increase: “There were nearly four million fewer riders in December 2019, the first full month after the price of a token increased Rs. 25 to Rs.150, than in the previous December, a 4.3 percent decline.” Use these data to estimate the price elasticity of demand for Karachi Metro Bus. According to your estimate, what happens to the Karachi Metro Bus’s revenue when the fare rises? Why might your estimate of the elasticity be unreliable?