Q.1 mercy mensesly buys 100 bottles of her favorite wine at the current impairment of $2. When asked at what price she would stop buying the intersection (the lowest price at which quantity inviteed is zero units), she answers $6. Based on this information alone, roughly estimate lards price centering? (1 line)
Q.2Present 2 reasons wherefore season has a very low price elasticity of call for. (2 lines)
Because there is no direct substitute and because consumers spend single small percentage of their incomes on salt.
No close substitutes and salt consumption represent a small fraction of kinfolk expenditure.
Q.3T/F and why: A high demand for cigarettes sum ups smoking and puts a burden on aesculapian precaution paid for by all members of society.
A higher demand pull up stakes increase smoking only if supply is non vertical. If supply is downward sloping or horizontal, a higher demand will lead to more cigarettes consumed. Although medical bills increase as more smokers get sick, smokers may also give off early than the rest of the population. Hence it is possible for smokers to reduce medical bills overall and reduce the burden on society.
Q.
4At a recent company meeting, you heard, one of the passenger vehicles, say: We strongly decide the market. We have pricing power. We organized the price to $100 from $80 and sales dropped only slightly. I think we can raise prices further. If we make more profits when the price is $100, then we will make even more profits when the price is $ cxx and keep the price at $ great hundred. Comment on the remarks.
The manager apparently assumes that if demand is inelastic in the $80-$100 price segment, it will continue to be inelastic in the $100-$long hundred segment. However, consider that substitutes that were previously not economical may pass more attractive if the price increases to $120. Thus the $100 - $120 segment may be elastic. As the price increases, revenues fall...If you take to get a full essay, order it on our website: Orderessay
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