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An exclusive yoghurt manufacturer sells 4,000 gallons per month at a price of 40 cedis each. When the price is reduced to 30 cedis sales increase to 6,000 gallons per month
a, calculate the price elasticity of demand for the yogurts over this price range
b, Is demand elastic unit elastic or inelastic
c, Calculate the change in revenue due to the change in price
A Restaurant manager decides to lower the price of a featured sandwich from Rs. 500
to Rs. 400, and she finds that sales during the week increase from 440 to 680
sandwiches. Is demand elastic or Inelastic?
A Restaurant manager decides to lower the price of a featured sandwich from Rs. 500
to Rs. 400, and she finds that sales during the week increase from 440 to 680
sandwiches. Is demand elastic or Inelastic?
Given Utility function U=20Q-2Q^2what quantity of good gives highest utility for the consumer? What will happened if the consumer obtains more quantity than the one you computed? Explain briefly
5A. Explain how microeconomics differs from macroeconomics. Which of the following headlines, taken from the various issues of The Daily Graphic, deal with microeconomics:
a. “Nestle Ghana posted a 18% increase in sales”
- “GRIDCO plans to slash more jobs”
- “Ghana’s Output Grew by 5.8%”
- “Housing starts soared 10% in September”
- “Ghana to Breach key Deficit Target it helped to create”
Explain each issue why it is a microeconomic issue
1. DBS Farms is a producer and retailer of farm products. DBS main products are Mangoes, Pawpaw and Pineapples. The current price of the Mangoes per Kilogram is GHS 50, the Pawpaw/Kg is GHS 80 and the Pineapple is GHS 40. This year the DBS Farms sold 10,000 kgs of Mangoes, 20,000 kgs of Pawpaw and 1 million kgs of Pineapples. In an attempt to improve revenue, the managers of the firm have decided to increase all prices by 10%. Market research has suggested that the price elasticity of demand for each product is: Mangoes: - 1.5; Pawpaw: -2.5; Pineapples: - 0.6. You have been asked to evaluate the planned price increases.
a. Comment on the planned price changes.
- Would a 10% price reduction have been better for some or all of the products?
Justina owns the Just’s Sobolo Store. She charges GHS10 per bottle for her handmade sobolo. You, the economist calculated the elasticity of demand for sobolo in her town to be 2.5. If she wants to increase her total revenue, what advice will you give her and why? Be able to explain your answer.
'Attempting to learn how to make decisions is an exercise in futility. All the most important decisions are made by people with little time and even less information , acting on instinct' Discuss.
Profit is the maximum value a company can distribute during the year and still expect to be worth as much at the end of the year as it was at the beginning. Discuss this statement , and comment on its value in measuring profit for decision making
Suppose a consumer has income of birr 20 which is to be spent on good B and A. Good B costs birr 4 and good A costs birr 2, then
A.Determine budget equation
B.Draw budget line
C.Calculate slope of budget line
D.Can consumer be on the budget line buying 5 unit of good A and 2 unit of good B
