Applications of Demand and Supply Analysis · Event: The WSJ reports that the prices of PC components are expected to fall by 5-8 percent over the next six months. . Scenario 1: You manage a small firm that manufactures PCs. • Scenario 2: You manage a small software company.
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- c. Suppose that Cape Cod Chip Company reduces the price of their 'kettle cooked' potato chips by 50%. Market studies indicate that tater lights compete with premium brand chips like the Cape Cod Co. products. Will this affect the supply of or the demand for the Tater Lights. How would the curve be affected? Supply/Demand (circle one). Direction of adjustment: + d. Illustrate the situation in (c) in the coordinate axis below. P10/variants/969445/take/13/ The minimum wage jumps from the current $7.25/hour to $15.00/hour. This has the effect of causing a shift in demand for restaurant dinners. Eventually, a large number of entre- preneurs see this demand and enter the restaurant business, creating a shift in supply. Using the graph outlines provided below, mark label the following: 1. Initial demand (D1), initial supply (S1) and initial equilibrium (E1). 2. The shift in demand (D2) and corresponding new equilibrium (E2). 3. The shift in supply (S2) and the corresponding new equilibrium (E3). Use arrows to show the direction of the supply and demand curve shifts from D1 to D2, and from $1 to $2. ہیں D 00000 + T THIN Price of Dinners BLACK – Supply and Demand for Restaurant Dinners X Quantity DemandedProblem 04-06 At point A on the demand curve shown below, how will a 1 percent increase in the price of the product affect total expenditure on the product? Price (S/week) 7 6 5 4 3 2 1 Demand 0 2 4 6 8 10 12 14 16 18 20 Quantity (units/week) Instructions: Enter your response rounded to the nearest whole number. Total expenditure will (Click to select) by about [ %
- The manager of a Cape Town superette carries a stock of Jive soft drinks. The countryexperiences an economic recession which yields an anticipated consumer income decrease of6 %. As a result, the income elasticity of demand for this product is estimated to be –2.5.(a) Calculate the percentage change in the quantity of your soft drink orders required toaccommodate the new demand without a surplus or shortage of inventory. [3](b) What does the elasticity coefficient of –2.5 reveal? [3]Explain how a florist (a person who give flower services for events) may adjust her capacity to fluctuating demand. (300 words)Problem 2 Refer to problem 1.(Problem 1: Auto Mart is a mythical seller of a variety of automobileparts and accessories. Auto Mart's owner, Jonathan Trott, wishes to determine the optimum order quantity for oneof the store's popular wiper blades. The annual demandfor the wiper blades is 16,000. The annual holding costper unit is US$2.50, and the cost to place an order is US$50:) Assuming that holding costs and ordercosts remain the same, if annual demand for wiper blades doubles to 32,000, does the EOQ also Double? Explainyour answer with relevant calculations.
- 5.(a). Calculate the point advertising elasticity of demand for advertising expenditures (A) = $10000 also with PT = $10000 (which should make QT= 370). Other variables and their values are given at the top, before question #1. The formula is: (b). Does this elasticity indicate that demand for Toyotas is very responsive to changes in advertising expenditures (thus suggesting that advertising is a very important way to increase sales)? Explain why or why not.The ABC Toy Company makes a few types of toy cars on one of its production line. Based on orders received and forecasts of future demand, it is estimated that the demand (in units) for the next four seasons is: Fall 10,000; Winter 8000; Spring 7,000; Summer 12,000. Inventory at the beginning of Fall is 660 units. At the beginning of Fall, ABC has 30 workers. Relevant costs: hiring: $100/worker hiredlayoff: $200/worker laid offinventory holding: $5/unit/seasonbackorder: $10/unitregular time cost: $5/hour Assume that the productivity is 0.5 units per worker hour, with eight hours per day and 60 days per season. Inventory cost is estimated based on the ending inventory for each period. The relevant costs are shown in the accompanying table.(a) Find the total cost of the level plan.(b) Find the total cost of the chase plan.(c) Suppose that ABC has negotiated with the union on the option of using the regular workforce on overtime ($8/hour) during Winter and Spring, if necessary. Overtime is…Question 1 The Potomac Range Corp manufactures a line of microwave ovens costing $500 each. Its sales have averaged about 6,000 units per month during the past year. In August, Potomac's closest competitor, Spring City Stove Works, cut its price for a closely competitive model from $600 to $450. Potomac noticed that its sales volume declined to 4,500 units per month after Spring City announced its price cut. What is the arc cross elasticity of demand between Potomac's oven and the competitive Spring City model? Would you say that these two firms are very close competitors? What other factors could have influenced the observed relationship? If Potomac knows that the arc price elasticity of demand for its ovens is -3.0, what price would Potomac have to charge to sell the same number of unit it did before the Spring City price cut?
- (02.04 LC) Price Supply Quantity Which of the following must be true of the supply above? O The supply is relatively inelastic. O The supply is relatively elastic. O The supply is unit elastic. བིཀ O The percentage change in quantity is greater than the percentage change in price O The change in quantity is greater than the change in price at every point.Question 1 The graphs given below represent the weekly demand function and supply function respectively for the stylus pen. Price (RM) Price (in RM) (12.148) Quantity (in thousand units) (19 188) Quantity (in thousand units) Your company is a manufacturer for stylus writing pen for tablet. Your company will not produce any pen if the price per unit is RM112 or lower. For each RM1 decreases in unit price, the quantity demanded increases by 250 units. The maximum production capacity for the company is 21,000 units per week. Both the demand and supply functions are assumed to be linear. Let be the quantity of stylus pen in thousand units and be the price in Ringgits Malaysia (RM), solve the following questions by applying linear mathematical model, to the situation. a) Find the supply equation. Interpret the slope and intercept(s) for the supply equation. b) Find the demand equation. interpret the slope and intercept(s) for the demand equation. c) Find the equilibrium quantity and price…QUESTION TWO X limited is a company producing two products A and B. The Marketing Manager has the following information for the products for the first quarter of 2020: Product Demand (Units) Price (K`000) January March January March A 30 15 10 12 B 25 30 10 2 The Marketing Manager wants to establish the Price Elasticity of Demand (PED) of the two products and strategize for increase in sales revenue. Required: (a) Define Price Elasticity of Demand (PED) (b) Calculate PED for Product A at price K5,000 per unit (c) Explain the significance of PED for the Marketing Manager in a country like Zambia. (d) On the basis of PED for each product the Marketing Manager wants to increase sales revenue for both products.(i) Interpret the results and (ii) Indicate the strategic option available for the manager as the projects increase in sales revenue.