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A store that sells rice discovers that when the price of 1kg rice Is R24 per kilogram, the quantity demanded is 306 kgs per week. When the price decreases to R21 per kg, then the sales increase to 340 kgs per week. Use this information to answer questions 1 and 2 below.
1-Determine the price elasticity of rice using the Arc method.
.2Discussthe relationship between the price elasticity of rice and the total revenue the store received from the sales. Advise the store on an appropriate pricing strategy.
Explain using the demand and supply analysis, the impact on the market for the cars as more people come to our country and at the same time the cost of the steel needed to make the cars decreases. Clearly state the effect on demand and supply and whether equilibrium price and/or quantity have increased, decreased or whether the outcome is uncertain.
A market consists of a single product Apple and two individuals A,B and C. A's demand for apple is given by Q=(16-4P), that of B's is Q =(20-2P) and that of C's is Q=(12-2P). If the market supply equation is Q=4P, then the equilibrium price and equilibrium quantity are?
A manager believes that the supply for his product is given by the equation P= 50+(Q/100).The arc elasticity of supply as price increases from Rs 10000 to Rs 20000 is closet to
John was consuming 100 balls of Cake (X) and 50 pieces of Fish (Y) per month. The price of Cake rose from GHS 2 to GHS 3. The price of Fish remained the same at GHS 4. How much would John’s income (M) have to rise so that he can still exactly afford 100 cakes and 50 fish?
What would we expect to happen to the market when the government imposes a price floor below equilibrium
Q3) From the specific supply function 𝑄𝑠𝑥 = 2𝑃𝑥 (Px is given in dollars), derive;
(a) the producer’s supply schedule and
(b) the producer’s supply curve?
Q2) From the demand function 𝑄𝑑𝑥 = 24 − 4 𝑃𝑥 (Px is given in dollars), derive;
(a) the individual’s demand schedule and
(b) the individual’s demand curve?
L = labour input in worker hours F = fuel input in gallon B = capital input in number of buses Q = output measured in millions of bus miles ,β1 = 0.45, β2 = 0.20 and β3 = 0.30
a. Suppose that capital input (number of buses) is decreased by 3 percent next year (which, certain older buses are taken out of service). Assuming that the other inputs are held constant, determine the approximate percentage change in output.
b. What type of returns to scale appears to characterise the transportation system (ignore the issue of statistical significance)?
c. Discuss some of the methodological and measurement problems one might encounter in using time-series data to estimate the parameters of this model
Q8) The following table provides you the estimated price, cross, and income elasticities for preferred commodities. Indicate from the price elasticities (e) if the demand is elastic or inelastic; from the cross elasticities (exy) if the commodities are substitutes or complements; and from the income elasticity (eM) whether the commodity is a luxury, a necessity, or an inferior good.
Price Elasticity of Demand (e)
Beef
0.92
Potatoes
0.31
Sugar
0.31
Electricity
1.20
Restaurant Meals
2.21
Cross Elasticity of Demand (exy)
Beef, Mutton
0.28
Tea, Coffee
0.67
Coke, Pepsi
-0.61
Sugar, fruits
-0.28
Electricity, natural gas
0.2
Income Elasticity of Demand (eM)
Butter
0.42
Margarine
-0.20
Air Coolers
0.35
Utilities
0.20
Burger o’ Clock
1.48
