Why the price of dvds is unchanged

Reference no: EM13201169

Suppose that the current market price of VCRs is $300, that average consumer disposable income is $30,000, and that the price of DVD players (a substitute for VCRs) is $500. Under these conditions annual U.S. demand for VCRs is 5 million per year. Statistical studies have shown that for VCRs the own-price elasticity of demand is -1.3. The income elasticity of demand for VCRs is 1.7. The cross-price elasticity of demand for VCRs with respect to DVDs is 0.75. Use this information to predict the annual number of VCRs sold if increasing competition from Asia causes VCR prices to fall by 10% with income and the price of DVDs is unchanged.

Reference no: EM13201169

Questions Cloud

Whether limiting waste disposal in manner provides solution : suppose that the disposal firm's state passes a law that limits waste disposal to 50,000 cubic feet per year, as a response to the monopolist's deadweight loss. Please calculate the change in the monopolist's deadweight loss.

Challenges due to the increasing use of e-finance : What are the positive aspects of increasing adoption of E-Finance globally and what are the major challenges due to the increasing use of E-Finance?

What is the dominant strategy : Mitchell Electronics produces a home video game that has become very popular with children. If the threat is not credible, what changes in the game would be necessary to make the threat credible.

Calculate roi for each segment : Find the Financial Statements and Supplemental Data and look for one of the notes to the financial statements that provides Segment Information.)

Why the price of dvds is unchanged : Suppose that the current market price of VCRs is $300, that average consumer disposable income is $30,000, and that the price of DVD players (a substitute for VCRs) is $500. Under these conditions annual U.S. demand for VCRs is 5 million per year.

Characterize each variable by scale of measurement : The major variables in this data are age of employee, wages earned by that employee before resigning, sex of employee, and series of variables indicating "membership" in a specific class, such as over 40, under 40, internal applicant, external app..

Which investment is more attractive at an oil price : An oil and gas investor is considering the acquisition of two fields. Both fields have the same production profiles:production starts in 2013 and averages 250 barrels of oil per day (bopd) during that year.

Calculate the probability in a random selection : In a class of 40 student,18 pass maths, 19 pass account,16 pass economics 5 pass maths and account only, 6 pass maths only, if each student pass at least one of the subject.Calculate the probability that a student selected at random fail in account.

What is the economic life of each device : two years ago East Beach Products (EBP) designed and built in-house an R&D device to measure a critical parameter in evaluating new designs. Based on lessons learned, the testing engineers have found a generic device which can be modified to measu..

User Account

All Pages