Income elasticity for companies

Assignment Help Macroeconomics
Reference no: EM131198123

1. Your company's competitors has lowered it prices by 20%. Your staff economist has estimated that the the cross price elasticity between your product and the competitor's product is -1.2. The boss wants to know how this will affect your companies revenues (sales)?

2. The income elasticity for your companies product A is 0.5; for product B he income elasticity it is 1.2; and for product C the income elasticity is -1.2. The country is in a recession and personal income is forecasted to fall by 2.2%. What is the forecasted revenue (sales) impact on product A, B and C, respectively. Which product would do the best (by sales growth) by how much and why?

3. Your boss wants to increase total revenue by 15%. Your staff economist has estimated that the price elasticity is 0.8. Should the company raise or lower its prices and by how much to affect a 15% revenue increase?

Reference no: EM131198123

Questions Cloud

Explain the process you would use for referral : You have been meeting with Gerry who has been drinking excessively for some time. He has now come to a point where he feels he should 'do something about it'. You are aware that there is a rehabilitation service where he can go for help. Explain t..
Swot analysis and value chain analysis of under armour : Complete a SWOT analysis and a value chain analysis of Under Armour. How well has the company performed to stated strategic objectives or performance targets? Support your assessment with factual data. Compare the strengths, weaknesses, opportunities..
How might your example be viewed from outside your culture : Then I want you to explain the importance your example holds for your culture, and the importance it holds for making you who you are. Other questions to address are: How might your example be viewed from "outside" your culture? How does your exam..
Derive an expression for the instantaneous field current : Derive an expression for the instantaneous electromagnetic torque during a three phase short circuit at the terminals. Assume the stator terminals of the machine are initially open-circuited and the speed does not change during the fault.
Income elasticity for companies : The income elasticity for your companies product A is 0.5; for product B he income elasticity it is 1.2; and for product C the income elasticity is -1.2. The country is in a recession and personal income is forecasted to fall by 2.2%. What is the ..
Donate large amount of money for student scholarships : A generous university benefactor has agreed to donate a large amount of money for student scholarships. The money can be provided in one lump sum of $12 million in Year 0 (the current year), or in parts, in which $7 million can be provided at the end..
Explain why transfer prices based on total actual costs : ACC202 - MANAGEMENT ACCOUNTING Explain why transfer prices based on total actual costs are not appropriate as the basis for divisional performance measurement - Using the market price as the transfer price, calculate the contribution margin for both..
What is their short run cost of remodeling : Hannah and Sam run Moretown Makeovers, a home remodeling business. The number of square feet they can remodel in a week is described by the Cobb-Douglas production function Q = F(L,K) = 10L0.5K0.5, where L is their number of workers and K is units of..
Express the rotor voltage equations of an induction machine : Express the rotor voltage equations of an induction machine in the arbitrary reference frame with the electric transients neglected.

Reviews

Write a Review

 

Macroeconomics Questions & Answers

  Explain an increase in the income velocity of money

Use the classical model and the quantity theory of money to predict how each of the following shocks would affect the real wage rate (W/P), the real interest rate (r), real aggregate income (Y), and the price of goods and services (P) in a closed ..

  Find equilibrium gdp

From the following information, find the marginal propensity to consume, compute the expenditure at each level of GDP, and find equilibrium GDP:

  Merits and demerits of the job specialization

There have been increasing debate on the merits and demerits of the job specialization. Most of its proponents have argued that job specialization have a positive impact to any organization or firm especially on increased labor productivity.

  Difference between symmetric and asymmetric multiprocessing

What is the difference between symmetric and asymmetric multiprocessing?

  Expressions for the average cost function

1) Write down expressions for the average cost function, marginal costfunction, and average variable cost. 2)What is the level of output that yields the minimum average cost of production?

  Calculation of profit maximizing price

A monopolist faces the demand curvep =11 - Q , where Q is measured in thousands of units. What is the monopolist profit maximizing price and quantity? What is the profit?

  What are risks and potential costs of implementing pricing

In relation to ITUNES music store, besides variable pricing, what are some other potential pricing policies that could increase revenue What are the risks and potential costs of implementing more sophisticated pricing schemes for the downloaded mu..

  Difference in wage rates in developed and developing country

Describe why the general level of wages in high in US and other industrially advanced countries. Determine the single most important factor underlying the long run increase in average real wage rates in the US

  Network in a period of time

What is a rating for the amount of data that can be sent over a network in a period of time?

  Explain the difference between saving and investment as

Explain the difference between saving and investment as defined by a macro economist. Which of the following situations represent investment? Saving? Explain.

  Define what is the purpose of the policy

the effects of the following government policies on the market equilibrium. Increases in the Minimum Wage Restrictions on International Trade Pollution Controls Natural Monopolies and Antitrust Regulation. What is the purpose of the policy.

  Deciding about factory lease and quantity of output

Suppose the firm decided to lease the large factory, and has put down a non-refundable deposit of 4,000 for that factory. Provide a recommendation concerning which factory firm should lease, and the number of boxes of chalk it should produce.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd