Identify some complements and substitutes

Assignment Help Microeconomics

Reference no: EM13537856

Pick one of their products and calculate about the price elasticity of demand and the income elasticity of demand for that product. Justify your guess about how elastic the demand is with things you know about the product (for example, the demand for a product is likely to be very price elastic if there are many substitutes). Based on your estimate of price elasticity of demand what would you recommend as far as raising or lowering the price to enhance sales? (TR test).

Finally, identify some complements and substitutes for the product. How strong do you think the cross-price elasticities are likely to be? Based on what you have written, if you were selling this product, what measures, prices, or data would you try to keep track of if you wanted to predict how your sales might change over time?
Explain the nature of cost, fixed and variable, explicit and implicit and sunk cost for your business.
USE THE INFO BELOW TO SOLVE

Here is an example (see attached or below) from the Pub where the cost of a menu item increased, so we had to pass that cost along to the Customer:

Salmon Burger
Cost
Selling price
Food Cost %
Units sold
Oct-13
$1.60
$4.20
38.1%
176
May-14
$2.09
$4.20
49.8%
14-Oct
$2.09
$5.75
36.3%
141

AS you can see, raising the selling price from $4.20 to $5.75 helped our food cost but decreased the sales of this item from 176 in October 2013 to 141 in October of 2014.

Reference no: EM13537856

Questions Cloud

Find the number of turns in the solenoid : A certain superconducting magnet in the form of a solenoid of length 0.350 m can generate a magnetic field of 8.50 T in its core when its coils carry a current of 65 A. Find the number of turns in the solenoid.

Can the cops bullets hit the robber : A robber's getaway vehicle, which can travel at 0.8c, is pursued by a cop. whose vehicle can travel at 0.4c. Realizing that he cannot catch up with the robber, the cop tries to shoot him with bullets that travel at 0.5c (relative to the cop). Can the..

Define two events and then apply the lorentz transformation : A spaceship of length L moves with a speed 7c/12 with respect to the ground. A ball is thrown from the back of the ship to the front. The speed of the ball with respect to the ship is c/3. Apply the Lorentz transformations to find:

Maximum and minimum number of different beat frequencies : You have 33 tuning forks that oscillate at close but different frequencies. What are the (a) maximum and (b) minimum number of different beat frequencies you can produce by sounding the forks 2 at a time, depending on how the frequencies differ?

Identify some complements and substitutes : Identify some complements and substitutes for the product

Differentiate between financial and managerial accounting : Differentiate between financial accounting and managerial accounting - What are the financial statements most frequently provided?

Hot chocolate effect-what is the ratio : Hot chocolate effect. Tap a metal spoon inside a mug of water and note the frequency fi you hear. Then add a spoonful of powder (say, chocolate mix or instant coffee) and tap again as you stir the powder. The frequency you hear has a lower value f..

Equity swap market has remained small over the years : How might debt/equity swaps help solve the international debt problem? Point out the benefits and drawbacks from the viewpoint of the debtor country. Why do you think the debt/equity swap market has remained small over the years?

Measured by earth-bound observers : A space explorer A sets off at a steady 0.95c to a distant star. After exploring the star for a short time, he returns at the same speed and gets home after a total absence of 80 years (as measured by earth-bound observers). How long does A's clock s..

User Account

All Pages