Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Microeconomics Expert

You work for Starbucks and know the following:

n=1.2 nI=2 nxy1=0.4 Nxy2= -0.6

n is the price elesticity of demand for a Starbucks tall caramel machiato, nxy1 is the cross elxaticity of demand between a starbucks tall caramel macchiato and Jave City's large caramel Javalance, nxy2 is the croxx elsaticity of demand bewteen a starbucks tall caramel macciato and a starbucks blueberry muffin, nI is the income elasticity of a starbucks tall caramel macchiato.

a) if the manager wants to increase his sales of a tall caramel macchiato by 6%, in what direction and by how much doe he need to change the price? I think he needs to decrease the price by .072 (which is 1.2 x.06=0.072). Not sure if that is correct.

b) if the manager makes the percentage price change that you find outd in part a) will total revenue increase or decrease? How do you now? I think revenue will increase due to the price decrease. The item is elastic.

c) starbucks raises its price of a tall caramel macchiato by 10%. The demand for Starbucks blueberry muffins will change by what percentage and in what direction?

d) Java city lowers the price of its large caramel javalance by 5%. The demand for starbuck's tall caramel machiato will change by what percentage and in what direction?

e) if average income increases by 3% by what percentage and in what direction wil the demand for starbucks tall caramel macchito change? Is a tall caramel macchiato a normal good or an inferior good and how do you know?

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M947968

Have any Question? 


Related Questions in Microeconomics

Assignmentone responsibility of an information assurance

Assignment One responsibility of an information assurance professional is to work with the organization's security team to explain risk assessment and report findings to executives. The report is likely to involve sensit ...

Great depression economy paperwritten assignmentplease

Great depression , economy paper Written Assignment Please provide a comprehensive answer to the following two questions: 1) Which were the main causes of the Great Depression? 2) Why did the Great Depression last so lon ...

Assignmentvisit wwwlovemarkscom and share your thoughts on

Assignment Visit www.lovemarks.com and share your thoughts on Branding and Pricing as it relates.....to "The Future Beyond Brands." Check out the Love/Respect Axis and see just where your favorite brand is sitting. (lmnu ...

Assignmentyou are the director of safety and health at

Assignment You are the Director of Safety and Health at Rotorcraft America, a mid-sized company that designs, manufactures and sells helicopters. Your organization has manufacturing operations in San Francisco, Californi ...

Instruction please answer all questions all questions carry

Instruction: Please answer ALL questions. All questions carry equal marks. Please do not write over 2000 words for the entire assignment. 1. a. Using the graph shown, analyze the effect a $300 price ceiling would have on ...

Discussion questionconsider a group of documents that has

Discussion Question Consider a group of documents that has been selected from a much larger set of diverse documents so that the selected documents are as dissimilar from one another as possible. If we consider documents ...

Assignment maximizing profits and minimizing lossesconsider

Assignment: Maximizing Profits and Minimizing Losses Consider a supplier of agricultural equipment who is deciding how much of two products should be produced by his firm. You determine what the two products are. Now cre ...

Question 1 the agrizone corporation invests 140140 million

Question 1. The Agrizone Corporation invests $14.014.0 million in a new inventory tracking system. A. The opportunity cost of Agrizone's decision is the value of leaving the money unutilized. B. The opportunity cost of A ...

Assignment production cost analysis and estimation applied

Assignment: Production Cost Analysis and Estimation Applied Problems Please complete the following two applied problems: Problem 1: William is the owner of a small pizza shop and is thinking of increasing products and lo ...

Assignmentxyz company enters into a contract with mary to

Assignment XYZ Company enters into a contract with Mary to landscape Ben's yard, using None Nursery to supply trees and buses. Kate owns the lot next to Ben's property. The landscaping is a gift from Mary to Ben, who is ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen