This\u00a0Tutorial\u00a0contains\u00a02\u00a0Sets\t\u00a0\tOption\u00a01:\u00a0Demand\u00a0equation:\u00a0\tQD\u00a0=\u00a0–\u00a05200\u00a0–\u00a042P\u00a0+\u00a020PX\u00a0+\u00a05.2I\u00a0+\u00a0.20A\u00a0+\u00a0.25M\t(2.002)\u00a0\u00a0(17.5)\u00a0(6.2)\u00a0\u00a0\u00a0\u00a0(2.5)\u00a0\u00a0\u00a0(0.09)\u00a0\u00a0\u00a0(0.21)\tR2\u00a0=\u00a00.55 \ufffd \ufffd\u00a0n\u00a0=\u00a026 \ufffd \ufffd \ufffdF\u00a0=\u00a04.88\tIndependent\u00a0variables:\tQ\u00a0=\u00a0Quantity\u00a0demanded\u00a0of\u00a03-pack\u00a0units\tP\u00a0(in\u00a0cents)\u00a0=\u00a0Price\u00a0of\u00a0the\u00a0product\u00a0=\u00a0500\u00a0cents\u00a0per\u00a03-pack\u00a0unit\tPX\u00a0(in\u00a0cents)\u00a0=\u00a0Price\u00a0of\u00a0leading\u00a0competitor’s\u00a0product\u00a0=\u00a0600\u00a0cents\u00a0per\u00a03-pack\u00a0unit\tI\u00a0(in\u00a0dollars)\u00a0=\u00a0Per\u00a0capita\u00a0income\u00a0of\u00a0the\u00a0standard\u00a0metropolitan\u00a0statistical\u00a0area\t(SMSA)\u00a0in\u00a0which\u00a0the\u00a0supermarkets\u00a0are\u00a0located\u00a0=\u00a0$5,500\tA\u00a0(in\u00a0dollars)\u00a0=\u00a0Monthly\u00a0advertising\u00a0expenditures\u00a0=\u00a0$10,000\tM\u00a0=\u00a0Number\u00a0of\u00a0microwave\u00a0ovens\u00a0sold\u00a0in\u00a0the\u00a0SMSA\u00a0in\u00a0which\u00a0the\u00a0supermarkets\u00a0are\u00a0located\u00a0=\u00a05,000\t1.\u00a0Compute\u00a0the\u00a0elasticities\u00a0for\u00a0each\u00a0independent\u00a0variable\t2.\u00a0Determine\u00a0the\u00a0implications\u00a0for\u00a0each\u00a0of\u00a0the\u00a0computed\u00a0elasticities\u00a0for\u00a0the\u00a0business\u00a0in\u00a0terms\u00a0of\u00a0short-term\u00a0and\u00a0long-term\u00a0pricing\u00a0strategies.\u00a0Provide\u00a0a\u00a0rationale\u00a0in\u00a0which\u00a0you\u00a0cite\u00a0your\u00a0results.\t3.\u00a0Recommend\u00a0whether\u00a0you\u00a0believe\u00a0that\u00a0this\u00a0firm\u00a0should\u00a0or\u00a0should\u00a0not\u00a0cut\u00a0its\u00a0price\u00a0to\u00a0increase\u00a0its\u00a0market\u00a0share.\u00a0Provide\u00a0support\u00a0for\u00a0your\u00a0recommendation.\t4.\u00a0Assume\u00a0that\u00a0all\u00a0the\u00a0factors\u00a0affecting\u00a0demand\u00a0in\u00a0this\u00a0model\u00a0remain\u00a0the\u00a0same,\u00a0but\u00a0that\u00a0the\u00a0price\u00a0has\u00a0changed.\u00a0Further\u00a0assume\u00a0that\u00a0the\u00a0price\u00a0changes\u00a0are\u00a0100,\u00a0200,\u00a0300,\u00a0400,\u00a0500,\u00a0600\u00a0cents.\ta.\u00a0Plot\u00a0the\u00a0demand\u00a0curve\u00a0for\u00a0the\u00a0firm.\tb.\u00a0Plot\u00a0the\u00a0corresponding\u00a0supply\u00a0curve\u00a0on\u00a0the\u00a0same\u00a0graph\u00a0using\u00a0the\u00a0following\u00a0MC\u00a0\/\u00a0supply\u00a0function\u00a0Q\u00a0=\u00a0-7909.89\u00a0+\u00a079.1P\u00a0with\u00a0the\u00a0same\u00a0prices.\tc.\u00a0Determine\u00a0the\u00a0equilibrium\u00a0price\u00a0and\u00a0quantity.\td.\u00a0Outline\u00a0the\u00a0significant\u00a0factors\u00a0that\u00a0could\u00a0cause\u00a0changes\u00a0in\u00a0supply\u00a0and\u00a0demand\u00a0for\u00a0the\u00a0low-calorie,\u00a0frozen\u00a0microwavable\u00a0food.\u00a0Determine\u00a0the\u00a0primary\u00a0manner\u00a0in\u00a0which\u00a0both\u00a0the\u00a0short-term\u00a0and\u00a0the\u00a0long-term\u00a0changes\u00a0in\u00a0market\u00a0conditions\u00a0could\u00a0impact\u00a0the\u00a0demand\u00a0for,\u00a0and\u00a0the\u00a0supply,\u00a0of\u00a0the\u00a0product.\t5.\u00a0Indicate\u00a0the\u00a0crucial\u00a0factors\u00a0that\u00a0could\u00a0cause\u00a0rightward\u00a0shifts\u00a0and\u00a0leftward\u00a0shifts\u00a0of\u00a0the\u00a0demand\u00a0and\u00a0supply\u00a0curves\u00a0for\u00a0the\u00a0low-calorie,\u00a0frozen\u00a0microwavable\u00a0food.<\/p>\n","protected":false},"excerpt":{"rendered":"
This\u00a0Tutorial\u00a0contains\u00a02\u00a0Sets \u00a0 Option\u00a01:\u00a0Demand\u00a0equation:\u00a0 QD\u00a0=\u00a0–\u00a05200\u00a0–\u00a042P\u00a0+\u00a020PX\u00a0+\u00a05.2I\u00a0+\u00a0.20A\u00a0+\u00a0.25M (2.002)\u00a0\u00a0(17.5)\u00a0(6.2)\u00a0\u00a0\u00a0\u00a0(2.5)\u00a0\u00a0\u00a0(0.09)\u00a0\u00a0\u00a0(0.21) R2\u00a0=\u00a00.55 \ufffd \ufffd\u00a0n\u00a0=\u00a026 \ufffd \ufffd \ufffdF\u00a0=\u00a04.88 Independent\u00a0variables: Q\u00a0=\u00a0Quantity\u00a0demanded\u00a0of\u00a03-pack\u00a0units P\u00a0(in\u00a0cents)\u00a0=\u00a0Price\u00a0of\u00a0the\u00a0product\u00a0=\u00a0500\u00a0cents\u00a0per\u00a03-pack\u00a0unit PX\u00a0(in\u00a0cents)\u00a0=\u00a0Price\u00a0of\u00a0leading\u00a0competitor’s\u00a0product\u00a0=\u00a0600\u00a0cents\u00a0per\u00a03-pack\u00a0unit I\u00a0(in\u00a0dollars)\u00a0=\u00a0Per\u00a0capita\u00a0income\u00a0of\u00a0the\u00a0standard\u00a0metropolitan\u00a0statistical\u00a0area (SMSA)\u00a0in\u00a0which\u00a0the\u00a0supermarkets\u00a0are\u00a0located\u00a0=\u00a0$5,500 A\u00a0(in\u00a0dollars)\u00a0=\u00a0Monthly\u00a0advertising\u00a0expenditures\u00a0=\u00a0$10,000 M\u00a0=\u00a0Number\u00a0of\u00a0microwave\u00a0ovens\u00a0sold\u00a0in\u00a0the\u00a0SMSA\u00a0in\u00a0which\u00a0the\u00a0supermarkets\u00a0are\u00a0located\u00a0=\u00a05,000 1.\u00a0Compute\u00a0the\u00a0elasticities\u00a0for\u00a0each\u00a0independent\u00a0variable 2.\u00a0Determine\u00a0the\u00a0implications\u00a0for\u00a0each\u00a0of\u00a0the\u00a0computed\u00a0elasticities\u00a0for\u00a0the\u00a0business\u00a0in\u00a0terms\u00a0of\u00a0short-term\u00a0and\u00a0long-term\u00a0pricing\u00a0strategies.\u00a0Provide\u00a0a\u00a0rationale\u00a0in\u00a0which\u00a0you\u00a0cite\u00a0your\u00a0results. 3.\u00a0Recommend\u00a0whether\u00a0you\u00a0believe\u00a0that\u00a0this\u00a0firm\u00a0should\u00a0or\u00a0should\u00a0not\u00a0cut\u00a0its\u00a0price\u00a0to\u00a0increase\u00a0its\u00a0market\u00a0share.\u00a0Provide\u00a0support\u00a0for\u00a0your\u00a0recommendation. 4.\u00a0Assume\u00a0that\u00a0all\u00a0the\u00a0factors\u00a0affecting\u00a0demand\u00a0in\u00a0this\u00a0model\u00a0remain\u00a0the\u00a0same,\u00a0but\u00a0that\u00a0the\u00a0price\u00a0has\u00a0changed.\u00a0Further\u00a0assume\u00a0that\u00a0the\u00a0price\u00a0changes\u00a0are\u00a0100,\u00a0200,\u00a0300,\u00a0400,\u00a0500,\u00a0600\u00a0cents. a.\u00a0Plot\u00a0the\u00a0demand\u00a0curve\u00a0for\u00a0the\u00a0firm. b.\u00a0Plot\u00a0the\u00a0corresponding\u00a0supply\u00a0curve\u00a0on\u00a0the\u00a0same\u00a0graph\u00a0using\u00a0the\u00a0following\u00a0MC\u00a0\/\u00a0supply\u00a0function\u00a0Q\u00a0=\u00a0-7909.89\u00a0+\u00a079.1P\u00a0with\u00a0the\u00a0same\u00a0prices. c.\u00a0Determine\u00a0the\u00a0equilibrium\u00a0price\u00a0and\u00a0quantity. d.\u00a0Outline\u00a0the\u00a0significant\u00a0factors\u00a0that\u00a0could\u00a0cause\u00a0changes\u00a0in\u00a0supply\u00a0and\u00a0demand\u00a0for\u00a0the\u00a0low-calorie,\u00a0frozen\u00a0microwavable\u00a0food.\u00a0Determine\u00a0the\u00a0primary\u00a0manner\u00a0in\u00a0which\u00a0both\u00a0the\u00a0short-term\u00a0and\u00a0the\u00a0long-term\u00a0changes\u00a0in\u00a0market\u00a0conditions\u00a0could\u00a0impact\u00a0the\u00a0demand\u00a0for,\u00a0and\u00a0the\u00a0supply,\u00a0of\u00a0the\u00a0product. 5.\u00a0Indicate\u00a0the\u00a0crucial\u00a0factors\u00a0that\u00a0could\u00a0cause\u00a0rightward\u00a0shifts\u00a0and\u00a0leftward\u00a0shifts\u00a0of\u00a0the\u00a0demand\u00a0and\u00a0supply\u00a0curves\u00a0for\u00a0the\u00a0low-calorie,\u00a0frozen\u00a0microwavable\u00a0food.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-210783","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/210783","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/comments?post=210783"}],"version-history":[{"count":0,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/210783\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/media?parent=210783"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/categories?post=210783"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/tags?post=210783"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}