Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Microeconomics Expert

You just opened a flower shop and are trying to understand pricing issue.

A) In order to be able to understand it better you are going to have to compute the following price elasticity’s of demand. What would happen if you were told that the elasticity’ are very importantin determining prices and what products to supply, so you decide to investigate this concept.

B) An Inelastic demand represents a change in price that will cause a smaller percent change in demand. It simply means that people are not responsive to the changes in price.  In order to recognize an inelastic demand  you should know that it will have some of, or maybe all of these following characteristics:

a) Not very many close substitutes, for instanced if you own a car and need to drive to work, you will need to buy gas.

b) Then buying gas will be a necessity, so you will have the necessity of purchasing gas in order to travel; so you will have to pay for the higher price of gas.

c) If there is a small percentage increase in the price salt, it will probably not even be noticed.

d) If a product that you do not buy frequently, (like toothpicks) has an increase in price you won’t bother about the higher price.

To really understand it, compute the following price elasticity’s of demand:

The price of a laptop increases by 20% and there is a 40% drop in the quantity demanded.

1) The price of a pack of cigarettes increases by 10% and there is a 5% drop in the quantity demanded.

Of the above exs, which are more elastic, and which is the least elastic? Why? Answer the following problems:

2) Why is elasticity an important concept for a business?

  • Bridge tolls
  • Beachfront properties
  • Gourmet coffee
  • Gasoline
  • Cell phones

3) Now that you are an expert on elasticity’s, what do you think would be the best time of year to raise prices, and why? 

4) What do you think the elasticity’s are in the flower business?

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M95284

Have any Question? 


Related Questions in Microeconomics

Assignmentfor this assignment write a paper describing how

Assignment For this assignment, write a paper describing how an analysis of intrusion signatures could be conducted for your project organization. Include the following in your paper: • A description of signature analysi ...

Question 1 a scatter diagram is useful to determine if a

Question 1. A scatter diagram is useful to determine if a relationship exists between two variables. True False Question 2. Consider the following gasoline data: Quarter 1, Year 1, Year 2 1, 150, 156 2, 140, 148 3, 185, ...

Description of assignmentreport paper basisstudents work

Description of Assignment: Report Paper basis. Students work together to research and profile a particular in Microeconomic policy: the property tax in the United States. Grading Criteria (What constitutes a good assignm ...

Assignmentwrite a 5-6 page paper on one of the following

Assignment Write a 5-6 page paper on ONE of the following topics. Advice: Read the question you choose very carefully, and make sure you are answering it. What you write must be clearly relevant to answering the question ...

Assignmentin this assignment you must break a norm this

Assignment In this assignment, you must break a norm. This breach must be done in a public forum. You will be writing an essay about your experiment, in which you must be sure to answer all of the questions listed in thi ...

Question 1 - read the following passage carefully and

Question 1 - Read the following passage carefully and answer questions The beverages industries in which Pepsi operate are highly competitive. They compete with major international beverage companies in multiple geograph ...

Assignmentfirms use inputs workers machinery natural

Assignment Firms use inputs (workers, machinery, natural resources) to produce outputs (goods and services). For example: General Motors uses steel, rubber and other materials to create automobiles. A pizza restaurant tu ...

Watch the video on the link belowthen answer the following

Watch the video on the link below. Then answer the following questions: 1. Would the incentives discussed in the video be able to work in a college setting? Why or why not? 2. Have you ever changed your behavior because ...

Assignmentthe paper is to be a properly formatted apa paper

Assignment The paper is to be a properly formatted (APA) paper that I expect will take at least 5 pages to do properly. It is to take the material discussed in the course and apply it to some issue or observation in your ...

Here is a link to the pdf version of dan ariellys

Here is a link to the pdf version of Dan Arielly's Predictably Irrational. http://radio.shabanali.com/predictable.pdf The Table of Contents starts on page 11. Scan through it and choose a chapter that looks interesting. ...

  • 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