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5.2. Use the income elasticity of demand to distinguish between a normal good and an inferior good. In your explanation provide the correct elasticity coefficient for each product and the relationship between income and quantity demanded. (4) 5.3. The cross-price elasticity coefficient between Apple and Android is 2,0. Are these goods complements or substitutes? (1)
Why have exports of France’s wine cluster stagnated relative to the U.S. wine cluster and other countries?
5.1. Suppose that the price of whiskey increases from R100 to R150 a bottle and as a result the quantity demanded decreases from 1 100 bottles to 800 bottles.
5.1.1. Use the ARC (midpoint) formula to calculate the price elasticity of demand for whiskey. (3)
5.1.2. Based on the calculated elasticity value in 5.1.1, indicate whether the demand in the market for whiskey is elastic or inelastic. (1)
5.1.3. Based on your answer in 5.1.2, illustrate the elasticity of demand in the market for whiskey. Clearly indicate the correct percentage changes in price and quantity on the elasticity graph. (4)
5.1.4. Explain how producers could increase total revenue given the calculated elasticity coefficient.
In a certain market, the demand for peach was given as QD = 400 -3P, the first
day of marketing in 2020, in August 2020, the demand for peach is now given
as QD = 200 -3P. From the statement above tell in one sentence the change in
demand; what did you consider as the indicator? Write down any five factors
responsible for the change in demand. Support your answers by sketching the
equations above on the same graph.
With an aid of a diagram explain start-up rule
TR = 120 Q – Q2
TC = 12 Q2 +30 Q + 10
Determine the quantity level at which the firm maximizes its total profit
Make up an example of a monthly demand schedule for pizza, and graph the demand curve. Give an example of something that would shift this demand curve, and briefly explain your reasoning. Would a change in the price of pizza shift this demand curve?
Does microeconomics help government or policy makers to understand the system and to improve the conditions of society if yes then how? Give detail with arguments.
1. From the give table calculate Elasticity of Price, Total Revenue and Marginal Revenue. Also, explain the relationship between AR and MR?
Price Quantity Total Revenue Marginal Revenue 6 0 5 100 4 200 3 300 2 400 1 500 0 600
Games consoles, such as Xbox, are sometimes sold bundled with games and sometimes without games. Using your understanding of elasticity, when is it good to bundle and when is it good not to bundle? Explain.
