What is the most likely reason that a movie theater would charge the same price for a popular movie with high demand and an unpopular movie with low demand? The theater's consumers expect the prices to remain consistent with its custom. Raising or lowering prices would likely cause a shortage or a surplus. The equilibrium price for the two movies is the same. Price ceilings and price floors prevent the theater from changing prices too greatly.

What is the most likely reason that a movie theater would charge the same price for a popular movie with high demand and an unpopular movie with low demand? The theater's consumers expect the prices to remain consistent with its custom. Raising or lowering prices would likely cause a shortage or a surplus. The equilibrium price for the two movies is the same. Price ceilings and price floors prevent the theater from changing prices too greatly.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter3: Demand Analysis

Section: Chapter Questions

Problem 8E: The Stopdecay Company sells an electric toothbrush for $25. Its sales have averaged 8,000 units per...

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The Stopdecay Company sells an electric toothbrush for $25. Its sales have averaged 8,000 units per month over the past year. Recently, its closest competitor, Decayfigh ter, reduced the price of its electric toothbrush from $35 to $30. As a result, Stopde cays sales declined by 1,500 units per month. What is the arc cross elasticity of demand between Stopdecays toothbrush and Decayfighters toothbrush? What does this indicate about the relationship between the two products? If Stopdecay knows that the arc price elasticity of demand for its toothbrush is 1.5, what price would Stopdecay have to charge to sell the same number of units as it did before the Decayfighter price cut? Assume that Decayfighter holds the price of its toothbrush constant at $30. What is Stopdecays average monthly total revenue from the sale of electric toothbrushes before and after the price change determined in part (b)? Is the result in part (c) necessarily desirable? What other factors would have to be taken into consideration?
While analyzing the semiconductor industry you notice that when the price of ultrapure water rises 2%, the demand for chip grade silicon declines 8%. From this data what appears to be true? O A Chip grade silicon is a substitute to Ultrapure water with a cross-price elasticity of +4. O B. Chip grade silicon is a complement to Ultrapure water with a cross-price elasticity of +0.25 O C. Chip grade silicon is a complement to Ultrapure water with a cross-price elasticity of-4. O D. Chip grade silicon is a substitute to Ultrapure water with a cross-price elasticity of -0.25
Which of the following statements about the relationship between the price elasticity of demand and revenue is TRUE a. If demand is price inelastic, then increasing price will decrease revenue O b. If demand is price elastic, then decreasing price will increase revenue OC. If demand is perfectly inelastic, then revenue is the same at any price Od. Elasticity is constant along a linear demand curve and so is revenue
Creative Homework/Short Project Assume that you arean entrepreneur who runs a bakery that sells glutenfree breads and cakes. You believe that the currenteconomic conditions merit an increase in the price ofyour baked goods. You are concerned, however, thatincreasing the price might not be profitable becauseyou are unsure of the price elasticity of demand for yourproducts. Develop a plan for the measurement of priceelasticity of demand for your products. What findingswould lead you to increase the price? What findingswould cause you to rethink the decision to increaseprices? Develop a presentation for your class outlining(1) the concept of elasticity of demand, (2) why raisingprices without understanding the elasticity would bea bad move, (3) your recommendations for measurement, and (4) the potential impact on profits for elasticand inelastic demand
During the Covid-19 pandemic that hits the world, the demand for personal computers and laptops has increased significantly due to online learning. One of the popular brands is Lenovo. The monthly supply of Lenovo laptops is given by the equation QS = 15,000 + 43.75P. If the current price for Lenovo laptops is $800, what is the price elasticity of supply for this brand? O a. 0.7 O b. 0.9 O c. 0.75 O d. No correct answers.
Creative Homework/Short Project Assume that you arean entrepreneur who runs a bakery that sells glutenfree breads and cakes. You believe that the currenteconomic conditions merit an increase in the price ofyour baked goods. You are concerned. however, thatincreasing the price might not be profitable becauseyou are unsure of the price elasticity of demand for yourproducts. Develop a plan for the measurement of priceelasticity of demand for your products. What findingswould lead you to increase the price? What findingswould cause you to rethink the decision to increaseprices? Develop a presentation for your class outlining(I) the concept of elasticity of demand, (2) why raisingprices without undetstanding the elasticity would bea bad move. (3) your recommendations for measurement. and (4) the potential impact on profits for elasticand inelastic demand
What does the price elasticity of demand indicate? How isthe perfectly inelastic demand curve illustrated . Give an example of a good which has perfectly inelastic demand and write down what the elasticity of perfectlyinelastic demand is equal to. What does the income elasticity of demand indicate ? What is the expected sign for income elasticity of demand for an inferior good ?
Dana is very upset that she can't get tlckets to the Rolling Stones concert because they are sold out. Which of the following demand states applies to Janet's sltuatlon? O a. nonexistent demand O b. overfull demand O c. latent demand O d. full demand O e. unwholesome demand QUESTION 6
en hired as an economic consultant by Google and given the lollwrg derrand wedfor wh st Price of Good X (Millions) Quantity Demanded for XQuantity Demanded ta (Millions) 260 240 5. Y Mllions) 200 220 240 10 15 220 20 200 260 Your advice is needed on the following questions: A) Draw the demand and supply curves for the above market. (4 marks) B) Calculate the price elasticity of demand for software X if the price of soltware X increases tom5 millen to 10 mil p t S whether it is elastic or inelastic.(4 marks) C) Calculate the cross elasticity of demand of software Y when the price of X falls from 20 milion lo 10 Mlion hdie between X and Y. (4 marks) D) Draw diagrams for the demand of X. If other things are not constant what will be the impact on the dend D E) Calculate the equilibrium price and quantity demanded and supply of the above market Label the equilm prt be quantity, and the equilibrium price. (4 marks) O Type here to search
When the price elasticity of demand is for the good is inelastic. Select one: O equal to infinity Ogreater than 1 O equal to 1 Obetween 1 and zero equal to zero demand
Good U has a price elasticity of demand of 2.5 and Good Y has a price elasticity of demand of 0.7. Which of the following statements below describes these elasticities? O U has fewer substitutes than Y. O The elasticity of U is likely to be a short-run measure and the elasticity of Y is likely to be a long-run measure. U is a luxury and Y is a necessity. O U is a good when there is an increase in income and Y is a good when there is a decrease in income. 22 56. ans 57 a MacBook Air esc F1 F2 F3 F4 F5 #3 24 3 Q W E T tab A S F os lock C V
Consider the market for chocolate ice cream where the supply and demand are very elastic. In the event of a decrease in demand, what is the likely change in market equilibrium? Oa large decrease in price and in quantity Oa large decrease in price and small decrease in quantity Oa small decrease in price and large decrease in quantity Oa small decrease in price and quantity