Tobacco And The American Revolution

Tobacco And The American Revolution
Tobacco has been around since the 17th century and was the first crop grown for money in North
America. In 1612, the settlers of the first American colony in Jamestown, Virginia grew tobacco as a
cash crop. Tobacco helped pay for the American Revolution against England. By the 1800's, many
people had begun using tobacco in different ways. Some chewed it, others smoked it in a fancy pipe,
and some even hand rolled a cigarette or cigar. Most people only smoked about 40 cigarettes a year.
It wasn't until 1865 that the first commercial cigarettes were made by Washington Duke on his 300
acre farm in Raleigh, North Carolina. He made hand rolled cigarettes and sold them to the soldiers
at the end of the Civil war. In 1881 cigarette smoking became wide spread due to James Bonsack's
invention of the cigarette making machine. Bonsack's machine could make 120,000 cigarettes a day.
Because of this machine, he created a business with Washington dukes son, James Duke. They built
a factory and made about 10 million cigarettes the first year and around one billion cigarettes only
five years later. They packed the cigarettes in a box with baseball cards and called them Duke of
Durham. They were known as the first brand of cigarettes. Buck Duke and his dad started the first
tobacco company in the U.S. and names it the American Tobacco Company. The American Tobacco
Company became the largest and most powerful company until the early 1900's. By then, several
companies had started making
... Get more on HelpWriting.net ...

Supply, Demand and Price Elasticity Paper
Every day people use products without thinking about the significance of that particular product.
Many people do not realize how important these products are and how much one product that is
used every day affects the economic status of not only the country but the world. Wheat is used to
make a large number of products which include beer and bread. The next few pages of this report
will discuss how supply and demand for wheat shifts, how it affects price, and whether or not wheat
is a luxury or a necessity will also be analyzed. Wheat, a main staple in food and a source for many
products, is a global commodity with diverse supply availability and changing demands. Each
country has its own production, consumption and exportation of ... Show more content on
Helpwriting.net ...
When a good is a necessity it is something that is needed; unlike a simple desire to have something.
These items have more of an inelastic demand even if the prices fluctuate. Wheat is a rich
commodity in our country. The demand for wheat is inelastic. No matter how high the price rise the
demand will still remain high in view of the fact that the price is determined by supply and demand.
There are many producers of wheat which does not raise the profit level much for the farmers since
their competition are all selling identical products. Other items, such as; basics in personal care,
food, commodities, and medicine. The basic items that are needed to survive. Demands for these
items may change over time but will not change very much. Their value can fluctuate if there are
comparable substitutes available. Personal care items such as clothes and shoes are not in a single
category where choices are concerned. There are a wide variety of manufactures and stores that sell
them. So if the price raises the demand would be elastic because of substitutes. Food as a basic need
is inelastic. However, if the prices were to rise on beef consumers could choose to substitute eating
chicken, turkey, or pork instead. So even though the prices rose the demand would not increase
because of acceptable substitutes. Medical service as a necessity is inelastic in demand. This is a
service that is unquestionably needed for survival.

Own-Price Elasticity Of Demand: Coco Cola
Summaries
Chapter 3 and 4
Submitted by:
XXX
Summary (chapter 3)
The demand, for a product or service, determines it worth. If the demand, for the product, will be
high, the price of the product will also be high. This is because demand and price are negatively
related (and depicted by negatively sloped demand curve). This also suggests that the increase in
price will decrease demand for the product and a decrease in the price, of product, will increase its
demand.
However, it is also essential for the economists to understand how demand and price relationship, in
terms of quantity, varies from product to product. When we systematically scrutinize different
products and services, it becomes apparent to us that the quantity demanded, ... Show more content
on Helpwriting.net ...
This is because high prices ensure higher revenues and all firms, companies or organizations, which
operate in corporate system, has only one core objective, generation and swelling of revenue.
As resources, which are used in the production, of product or service, are limited and have cost;
therefore, it is essential for the producer to determine it production. It is also to be recognized that
there are various types, of resources and different ratios, of these resources are used to produce
optimal quantity, as per budget restraints.
For any firm, operating in a competitive market or corporate realm, it is essential to have fair
understanding of operations; whether to continue operations or not. According to the studies, a firm
will continue to produce, as long it could cover its variable cost. If a firm can manage to cover it
variable cost, it would continue its operations. Firm would be forced to shut down its operations
when the variable costs increase; however, in the short run, fixed cost has no impact on the short–
run decisions. In addition, despite of shutdown, a firm cannot leave industry and it will continue to
pay fixed cost, for a certain time, on which it has agreed, before the start of

Supply, Demand and Price Elasticity of Coffee
When many individuals wake up in the morning, the first thought they often have is: where is the
coffee? The price of coffee fluctuates no matter what quantity is sold. The following paper will
discuss what makes the price of coffee rise and what consumers do when the price is more than they
are willing to pay. Many factors are taken into consideration when the price of coffee is being
determined. The main two factors are the supply that is demanded and the availability of substitutes,
which will be discussed below. Coffee is a commodity enjoyed all over the world. Bistros in Paris to
large franchise chains in the United States; the fact is people love coffee. Take a look at the causes
for shifts in supply and demand for one ... Show more content on Helpwriting.net ...
Some would say that coffee is a luxury, while others will argue that coffee is a necessity. Since a
good is considered a necessity when the quantity that consumers buy is not dependent on its price
then coffee is considered a luxury. This was chosen because the quantity that people buy is
dependent on its price. With there being substitutes for coffee that are less expensive, consumers
will quit buying coffee when the price is too high (Hubbard & O'Brien, 2010).
Most consumers buy coffee as a result of wanting the caffeine coffee supplies. Instead of buying
coffee, consumers could choose to purchase another beverage with a high level of caffeine, such as a
carbonated beverage, tea, or even an energy drink, or shot. Some consumers may also decide to
purchase caffeine pills from a local pharmacy instead of forking out the cost for coffee. The price
elasticity of coffee is impacted primarily by the amount of substitutes that can replace it. These
substitutes could be considered a necessity or a luxury. The more substitutes a product has, the
greater price elastic the product. Luxuries have more of price elasticity because luxuries are not
considered to be something needed to survive. With coffee having many substitutes and being a
luxury it has a high elasticity (Hubbard & O'Brien, 2010). In conclusion, coffee prices may rise and
fall periodically throughout the year. Whether someone is just waking up, or taking a stroll down

Globalization is the Process of Interaction and...
Introduction
Globalization
Globalization, as defined by The Levin Institute of The State University of New York, "is a process
of interaction and integration among the people, companies, and governments of different nations."
Globalization is a centuries old practice, affecting production as well as consumption, and is driven
by investment and trade and supported by information technology. Over time, globalization has also
become a political issue. Today many governments have adopted free–market economic systems,
negotiated for reductions in trade barriers, and have established world–wide agreements to promote
trade in goods, services, and investment (Levin Institute). In recent history, globalization has
expanded rapidly due to ... Show more content on Helpwriting.net ...
In a competitive market no single producer and no single consumer has control over how the market
operates. No single producer or consumer can determine the price of goods and services nor how
much will be exchanged. The world's cotton market is one such interdependent competitive market.
World's total cotton production
As reported by the United States Department of Agriculture as shown in Table 1 in Appendix A, the
world's total cotton production was 126.6 million four–hundred eighty pound bales from August
2011 to August 2012. The world's total production dropped to 123.1 million bales in August 2012 to
August 2013. The three world's largest cotton producing countries in 2011/2012 were China, India,
and the United States producing 34 million, 29 million, and 15.5 million pound bales, respectively.
In 2012/2013, China's production increased to 35 million bales, India's production decreased to 28.5
million bales, and the United States' production increased to 17.3 million bales. These three
countries produce approximately 65% of the world's total cotton supply.
World's total cotton consumption
The world's total cotton consumption in 2011/2012 was 103 million bales and rose to 107.1 million
in 2012/2013. The world's largest cotton consuming countries in 2011/2012 were China, India, and
Pakistan consuming 38 million, 19.7 million, and 10 million bales, respectively. In 2012/2013,
China's consumption decreased to 36 million bales,

Products, Services, and Prices in the Free Market Economy:...
Domino 's Pizza, Inc
In 1960 Tom Monaghan and his brother James bought DomiNicks, a pizza store in Ypsilanti,
Michigan. In 1965 the company name was changed to Domino 's Pizza. Domino 's Pizza is one of
the leading companies in the pizza delivery industry in the United States and around the world. The
company headquarters is located in Ann Arbor, Michigan and they employ approximately 13,500
people. Total revenue was registered at $1,511.6 million during the fourth quarter of 2005, a growth
of 4.5% over 2004. The performance gain of the company was $199.1 million during the fiscal year
of 2005, a growth of 16.2% over 2004. The pure gain was $108.3 million in the fiscal year of 2005,
a growth of 73.8% over 2004. Domino 's enterprise ... Show more content on Helpwriting.net ...
At $7 the price elasticity for consumers also increased and bought more pizza at this price than at
any other price sold.
Time
According to the graphs provided above, with prices ranging from $10–$4 during certain periods
and the company making price adjustments, the price elasticity remained most valuable at $7. At
this point, the company realizes that $7 is where they are making most of their profit and that is the
reason Domino 's Pizza would leave their product on the market at this price for a longer time. It
takes time in order for consumers to adjust to a specific product at a new price. The longer Domino
's Pizza has their product on the market at this price, the greater the demand. This demand will help
increase the company 's revenue. At this time Domino 's Pizza would test one of his other products
to see if that product has as much of a demand as pizza at its selling price. The concept of time is
looking to see if the demand of the company 's product rises over a certain period. Throughout this
time, the company can introduce another product similar to pizza and determine if consumers are
willing to have the same demand for this product.
Conclusion
Domino 's Pizza can take advantage of the elasticity of the demand to maintain a steady source of
high revenues. Increasing the pizza prices will provide more revenues but will decrease the demand
and the revenues will

Price Elasticity of Demand
Price elasticity of demand
In economics and business studies, the price elasticity of demand (PED) is an elasticity that
measures the nature and degree of the relationship between changes in quantity demanded of a good
and changes in its price.
Introduction
When the price of a good falls, the quantity consumers demand of the good typically rises; if it costs
less, consumers buy more. Price elasticity of demand measures the responsiveness of a change in
quantity demanded for a good or service to a change in price.
Mathematically, the PED is the ratio of the relative (or percent) change in quantity demanded to the
relative change in price. For most goods this ratio is negative, but in practice the elasticity is
represented as a positive ... Show more content on Helpwriting.net ...
It may be possible that quantity demanded for a good rises as its price rises, even under conventional
economic assumptions of consumer rationality. Two such classes of goods are known as Giffen
goods or Veblen goods. Another case is the price inflation during an economic bubble. Consumer
perception plays an important role in explaining the demand for products in these categories. A
starving musician who offers lessons at a bargain basement rate of $5.00 per hour will continue to
starve, but if the musician were to raise the price to $35.00 per hour, consumers may perceive the
musician's lessons ability to charge higher prices as an indication of higher quality, thus increasing
the quantity of lessons demanded.
Various research methods are used to calculate price elasticity:
• Test markets
• Analysis of historical sales data
• Conjoint analysis
Mathematical definition
The formula used to calculate the coefficient of price elasticity of demand for a given product is
This simple formula has a problem, however. It yields different values for Ed depending on whether
Qd and Pd are the original or final values for quantity and price. This formula is usually valid either
way as long as you are consistent and choose only original values or only final values.
A more elegant and reliable calculation

Classification of Price Elasticity of Demand
Classification of Price Elasticity of Demand 1. Price Elastic Demand (% ΔQd > % ΔP) ϵ > 1 If the
value of price elasticity coefficient is greater than one in absolute value. This means that a small
change in price results to a greater change in quantity demanded. Goods which are elastic tend to
have some or all of the following characteristics: They are luxury goods They are expensive and a
big % of income e.g. sports cars and holidays Goods with many substitutes and a very competitive
market. E.g. if Simsbury's put up the price of its bread there are many alternatives, so people would
be price sensitive Bought frequently Graph: We say a good is price elastic when an increase in
prices causes a bigger % fall in demand. e.g. if price ... Show more content on Helpwriting.net ...
For example, if Sky increase the cost of premiership pay per view, many football fans will pay the
extra price. Though because it isn't a necessity, demand may be less inelastic than say petrol. Tap
water. For householders, tap water is a necessity, with no alternatives. If the water company increase
the cost of water bills, people would keep buying the service. It would have to rise to a very high
price before people disconnected their water supply. This is why tap water is regulated. Diamonds.
Bought very infrequently, diamonds are the ultimate luxury with few exact alternatives. You could
buy other precious gems, but others may not have the same allure as diamonds. A cut in price
wouldn't increase demand very much. Peak rail tickets. For commuters who rely on the train to get
to work in London, demand will be very inelastic. If price of fares from Surbiton to London
increase, demand will only fall by a small amount. The alternatives for commuting into London,
such as driving are limited. Apple iPhones, iPads. The Apple brand is so strong that many
consumers will pay a premium for apple products. If the price rises for apple iPhone, many will
continue to buy. If it was a less well known brand like Dell computers, you would expect demand to
be price elastic. References: http://www.economicshelp.org/blog/7019/economics/examples–of–
elasticity/ 3. Unitary Elastic Demand (% ΔQd = % ΔP) ϵ < 1 If the value of elasticity

Microeconomics Chapter 4 Essay
Chapter 4
2. Why do economists use percentages rather than absolute amounts in measuring the
responsiveness of consumers to changes in price?
Why do economists use percentages rather than absolute amounts in measuring the responsiveness
of consumers to changes in price? Economists use percentages rather than absolute amounts for two
different reasons. The first reason for using percentages rather than absolute amounts has to do with
the affect a particular amount can have on demand. The example in our book refers to using dollars
or pennies, in one instance the dollar amount leads to a demand that is elastic, however that same
dollar amount in pennies would lead one to see that demand is inelastic. The amount is the same, ...
Show more content on Helpwriting.net ...
So, for Ed=1 this represents unit elasticity.
8. The owner of a health club asks you for advice about whether the company should raise or lower
the price of its membership this year based on the following information: last year the club raised
the price of its membership by 5% and the number of members paying the same fee fell by 7%.
Based on the information provided we could use the price elasticity formula to determine if the price
change represented elastic or inelastic demand. Divide the change in quantity by the change in price
(0.07/0.05) and find the price elasticity coefficient. Using what we have learned about price
elasticity, it is clear that Ed=1.4, which is elastic. Using the table given in example 4.2, we see that a
prince increase on an elastic good results in total revenue decrease. The owner should lower prices
to see a total revenue increase.
11. A gasoline station very near a professional football stadium parks cars on its lot to make money
on game days. Last year it charged $4.00 per car and parked 1000 cars. This year it raised the
parking price to $5.00 and parked 850 cars. Did the station owner make a good economic decision
in raising the parking prices from one year to the next? Explain.
. Did the station owner make a good economic decision in

Questions on Milk: Markets, Prices, and Price Setting
Supply and demand: Markets, Prices and price setting 1. Explain what happens to price and quantity
of milk when the following events occur: a. More people start eating cereal for breakfast. The
assumption is that if more people start eating cereal for breakfast, the demand for milk will rise
because people use milk on their cereal. There are substitutes for milk, including soy milk, almond
milk, and other milk–like products. In addition, some people eat cereal without milk, wetting it with
another substance or simply eating it dry. For example, granola–based cereals are often consumed
like trail mix, rather than in the traditional bowl–of–milk format. Therefore, there may not be a one–
to–one correlation between increased cereal consumption and increased milk consumption.
However, if cereal consumption increases and the consumption has the same pattern as current
cereal consumption, then milk consumption will increase. This is will increase demand. It is not a
change in quantity demanded, but a shift in the demand curve. When the use of one product is tied to
the use of another product and use of the first product goes up, demand for the second product will
go up and that increase in demand will not be dependent upon the price in the original demand curve
(Rittenberg & Tregarthen, 2009). Therefore, with this shift in the entire demand curve, one would
expect prices of milk to rise because demand will hold steady despite an increase in rising prices. b.
There is a

Supply, Demand, and Price Elasticity Paper
Supply, Demand, and Price Elasticity Paper
2010
Learning Team A
University of Phoenix
10/17/2010
Petroleum is a necessity for the majority of humans across the world. Petroleum is a natural resource
that has few competitors. In recent decades alternative energy sources have been investigated, but
the use of petroleum is still ahead of the game as the world's primary energy source in the use of
automobiles, but petroleum is also the main ingredient in plastic. We use plastic everywhere, the
structure of our cars, furniture, computers, toys, and the list is endless. Petroleum is also an
ingredient in many fertilizers, used in clothing, and carpet backing. To understand the shifts of
supply and demand of petroleum we must ... Show more content on Helpwriting.net ...
It was once thought that oil was Price Inelastic, yet since the introduction of Hybrid cars, and people
cutting down their consumption of oil. Prices have dropped from over $4.00 a gallon and, their
demand for oil. The prices still creep higher and it fairly inelastic, but there is a breaking point in a
market once thought to be as inelastic as insulin.
The commodity of petroleum is not just important and inelastic in the market but also to the vast
majority of the world. There is no replacement for petroleum or the products that are derived from it.
Now a necessity product that is derived from petroleum would be gasoline which is use by a vast
majority of the world population for cars. Since there is no substitute for petroleum there is also no
substitute for gasoline.
Petroleum is a commodity in which there is no substitute for because of all the different products
that are made from this one commodity. Petroleum is used to make products that are used on a daily
basis by almost everyone around the world. These products include jet fuel, fuel for cars, diesel
fuels, and kerosene. These are the most popular products that are made from petroleum and since
there is no real substitute for these fuels there is no substitute for petroleum as a whole. There are
other items that are made from petroleum as well such as lubricants (motor oil), asphalt, and tar.
These items are also products that for the most are used on a daily basis by the majority of the
people around the

Would A Tax On Sugar Sweetened Beverages Reduce Obesity...
Would a tax on sugar–sweetened beverages reduce obesity and improve nutrition in New Zealand?
INTRODUCTION According to the World Health Organization, obesity is defined as abnormal or
excessive fat accumulation that presents a risk to health. A simple population assessment of obesity
is the body mass index (BMI), in which the body weight (in kilograms) is divided by the square of
the height (in metres). A body mass index of 30 or more is generally considered obesity (WHO,
2014a). Obesity increases the risk of cardiovascular diseases, endocrinological disorders and even
cancers. The prevalence of obesity has dramatically increased not only in high income countries, but
also in middle– and low–income countries. Obesity is now considered a world–wide epidemic with
at least 2.8 million deaths from obesity related conditions each year (WHO 2014b). The 2012/13
New Zealand Health survey showed that about 1 in 3 adults New Zealanders (15 years and above)
were obese (Ministry of Health 2013). It is estimated that obesity related deaths make up 60% of all
deaths in New Zealand (Christchurch Weight Loss Surgery 2014). The increasing consumption of
sugar–sweetened beverages (SSBs) has been an important contributor to the worldwide obesity
epidemic (Harvard School of Public Health, 2012; Institute of Medicine, 2012). Historically,
taxation has been effective in reducing the consumption of some substances that contribute to ill–
health such as tobacco and alcohol (Thomson 2007, p. 3;

Starbucks Is A For Selling And Roasting Its Famous Whole...
Starbucks is known for selling and roasting its famous whole bean coffees made of Arabica beans,
and also sells teas, baked goods, and even merchandise worldwide. Customers can now order what
they want directly online, in a supermarket, and other food service markets too. The company has
reached success and keeps growing over the years. Considering market demand, as a consultant, I
will evaluate the trends in demand over time and the impact on the firm and industry. Starbucks
invests in trendy advertisements and décor that attracts their customers and keeps their products well
known. Their central target market is "men and women aged 25 to 40" (O'Farrell, 2016). These
customers are about half of their entire business. The company also target "young adults, aged 18 to
24, total 40 percent of Starbuck's sales" (O'Farrell, 2016). This target market focuses on college
students, because their business place is usually an area these customers go to study, hang, or have
meetings. Finally, Starbucks targets 13 to 17 year olds, which consists of two percent of sales
(O'Farrell, 2016). Although Starbucks does not target market kids they do offer kids drinks, which
parents tend to buy for their kids. Starbucks sells to a particular demographic. The majority of their
customers are from the city or "upscale suburban areas" (O'Farrell, 2016). The target market focuses
on well–established people with high incomes. By having this specific target audience Starbuck is
able to grow and

Swot Analysis Of Marriott
1) Price Elasticity, demand and revenue
Price is one of the important factors in any industry; price and demand are interrelated to each other
and moves in to opposite direction. Rational pricing encourage consumers to purchase the goods and
service increase the demand other hand high price will decrees the demand .price elasticity can be
define as responsiveness of quantity demanded when the price change .it measure by Percentage of
quantity change in demand divided by Percentage quantity of price change. When elastic demand is
less than one it is inelastic and one is unit elastic infinite is completely elastic , Zero is completely
inelastic .availability of substitute affect the demand of particular product elasticity or in elasticity
.case of hospitality sector demand is fluctuate time to time compare to other retail industries this
fluctuation happened because of the in flexibility e.g. for industrial manufacture industries demand
fall ... Show more content on Helpwriting.net ...
Marriott pricing structure closely linked with distribution. Marriott follow a ethical price tactics it is
guideline it's called Look No Further Best Price Guarantee Marriott ensure that all the employees
has follow this and guest get best price in any of the Marriott booking channels. Price
integrity/parity one of strategy for Marriott guaranty best available rate of booking through any
Marriott web site or any Marriott branded website, direct in the hotel .more or less customers get not
only internet rate but also available room rate any online or offline Marriott booking channel. So
Marriott provide same rate or better than the travel agencies rate .Marriott pricing system change to
fixed rate to dynamic price. As a international operator and franchisor major problem Marriott do
pricing strategy day by day basis because most the franchisor show to move to the low price
category to gain more

Assignment 1 Essay example
Team assignment #1
Go to the National Bureau of Economic Research (NBER) Web site, http://www.nber.org, and select
New Working Papers. In the Google search space, type "alcohol." Use the titles and summaries of
the papers to answer the following questions relating to elasticity:
(a) Do the mentally ill have perfectly inelastic demands for cigarettes and alcohol?
Elasticity helps us define the relationship of changes in price and incomes to the effect of supply and
demand. The question posed is: do the mentally ill have perfectly inelastic demands for cigarettes
and alcohol? First, we must define what perfectly inelastic demand is. As defined by our textbook, a
perfectly inelastic demand is one in which price change results in no ... Show more content on
Helpwriting.net ...
We have all seen that famous scene where a stressed individual will order numerous shots of hard
liquor to ease their sorrow, but nevertheless with all that simple knowledge the answer to the
question is actually no. By the research done in this paper by Christopher. J Ruhm he brings to light
that alcohol intake doesn't have a positive increase in bad times instead it has a decline in
consumption. He uncovers that heavy drinkers decrease quite a lot with the loss of income, and that
even recreational and binge drinking declines as well though at a smaller pace. As a whole, alcohol
consumption doesn't increase during bad times overall.
Reference
Working paper 8511 Does Drinking Really Decrease in Bad Times? By Christoher Ruhm and
William Black
(c) What is the effect of cigarette taxes (and smuggling) on the consumption of alcohol? What does
that imply about the cross elasticity of demand between the two?
Tax implications and its effect on alcohol consumption were studied in detail in working paper
8962. This study was done in Canada. What the writer found was that higher tax rates for cigarettes
wouldn't stimulate alcohol consumption as a replacement habit. When smuggling was factored into
the equation, it was found that in Canadian smuggling could have increased both cigarette and
alcohol consumption.
After analyzing the data with two different data sets and trying to determine cross elasticity, the first
analysis determined that cigarettes and alcohol

Study on Microeconomics
1. i) If the price of wool decreases in response to an increase in wool supply, this is graphed as
follows. Basically, P drops, which pushes AD to the right, which in English means the quantity
demanded increases. Q1 is the original equilibrium point while Q2 is the new equilibrium point. ii)
If supply of cotton decrease, the price of cotton increases. Demand should decrease as the result of
the price increase, bringing the market to a new equilibrium level (Q2). iii) In this scenario, demand
drops because people have less wealth and the price increases. The first part pushes P down, but the
second pushes P up. We don't know which one is stronger, so we can only guess. One guess is that
these two effects offset each other. If the two events are simultaneous, the equilibrium point might
not move at all.
2.i) P = 8 – .08Q. To solve for Q, first do a little algebra, such that .08Q + 4 = 8 or 4 / 0.08 = 50 pies.
ii) If the price is increased by 10% (to $4.4), the demand will be 45. The total revenue at the current
price is 50*4 = $200. At the new price it will be $4.4*45 = $198. The president is wrong about
raising the price Jenny's price delivers more revenue. iii) The price elasticity of demand for sausage
rolls is:
%Î" demand / %Î" price, so: –14.8% / 8% = –1.85
This means that sausage rolls are an elastic good. Demand will decrease at a greater rate than the
price increase. iv) There is cross–price elasticity at work here. This is:
% Î" quantity demanded of one

Essay about Coffee Supply, Demand and Price Elasticity
Coffee Supply, Demand, and Price Elasticity
Team B: Walelia Naholowa'a, Priscilla Swanson, Delniece Williams, Nigel Sturge
ECO/212
Robert Coates
February 26, 2012
Coffee Supply, Demand, and Price of Elasticity Statistics show that over half of the American
population consumes coffee on a daily basis. You may drink coffee hot, cold, mixed, or even in a
frappuccino. Individuals are able to make coffee at home, or buy it on the go. Coffee provides
people with caffeine, which ultimately gives energy for hardworking people all around the world.
The main focus for this paper will cover the following topics, with coffee as the basis: causes for
shifts in supply and demand, how coffee supply and demand influence price, quantity, ... Show more
content on Helpwriting.net ...
Changes in the equilibrium price and quantity depend on exactly how the curves shift (Berkeley
University, n.d.).
How supply and demand influence price, quantity, and market equilibrium
These shifts in supply and demand would influence price, quantity, and market equilibrium because
of the natural disasters, shift in prices or speculation the supply of coffee decreases, which would
cause a significant product shortage for consumers. Due to a shortage, consumers would to pay
higher prices in order to purchase coffee and all coffee producers would then demand a higher price
in order to produce more products. Higher prices are beneficial to the producers of the product, but
consumer would purchase fewer products. Lower product pricing would discourage coffee
production, but would benefit consumers. Both supply and demand would balance consumption,
which is demand and production, which is supply.
Market speculation would also drive the price of coffee up or down. For instance a study issued by
the Harvard medical school in August 2004 states that "coffee consumed in moderation is safe and
offers health benefits such as lowering the risk of gallstones and type two diabetes, and reduced
cancer risk for women." This speculation because of the health benefits publish may drive the
market price of coffee.

Essay On Supply Demand And Price Elasticity
Supply, Demand, and Price Elasticity
We use multiple products on a daily basis, from toothpaste to ink pens. Though we may use these
items for mere moments, there is a different supply and demand cycle for them. Every product has a
different supply and demand cycle, and this cycle varies throughout time. Some items may
constantly be in demand, like cotton, and others may be in demand seasonally, like eggnog. These
shifts in supply and demand may influence the price of certain products, how much of the product is
available at any given time, etc. Commodities available during only peak times throughout the year
may even be substituted with a similar item. These seasonal items are considered ... Show more
The production of polyester is considered as planet polluting. Another substitute would be Organic
cotton, which is pesticide free and tinted naturally. Hemp is also a good substitution for cotton.
According to the Hemp Industries Association, hemp has fewer pesticides than cotton. Cotton, when
blended with other fabrics, can be substituted for 100% cotton making it less expensive than other
fabrics like linen, wool, spandex, silks, and lycra.
Because cotton is so popular, an increase in price does not automatically mean that there will be a
decrease in the quantity demanded. Since the first choice for clothing is cotton, people will continue
to purchase clothing and there will not be an effect on the supply demanded, even with a price
increase. With essential commodities, price increases will not negatively affect the quantity
demanded. Cotton has an inelastic demand because the quantity is not affected (Elastic and Inelastic
Demand).
Cotton is one of the most widely used products today. It is noted as having an inelastic demand
because of the various other products that can be used in place of it. A change in price will more
than likely have no effect on the decision to utilize its benefits, as it is present in many luxury and
necessity items. However, if pricing is changed, causing a change in demand, businesses could

Synopsis of Price Elasticity of Demand on Automobile Industry
One definition of elasticity is what happens to consumer demand for a good when prices increase.
As the price of a good rises, consumers will usually demand a lower quantity of that good, perhaps
by consuming less, substituting other goods, and so on and the demand of complementary product
will also be less. The greater the extent to which demand falls as price rises, the greater the price
elasticity of demand. Conversely, as the price of a good falls, consumers will usually demand a
greater quantity of that good, by consuming more, the demand of complementary will also rise,
dropping substitutes, and so forth. However, there may be some goods that consumers require,
cannot consume less of, and cannot find substitutes for even if prices ... Show more content on
Helpwriting.net ...
If the oil price will rise, the demand of auto industry will decrease. We will measure the
responsiveness in the demand for commodity to a change in the price of commodity. The cross–
price elasticity of demand is very important concept in managerial decision–making. Firms often use
this concept to measure the effect of changing the price of a product they sell on the demand of other
related products that the firm also sells. A high positive cross–price elasticity of demand is often
used to define an industry, since it indicates that various commodities are very similar.
Further, elasticity will normally be different in the short term and the long term. For example, for
many goods the supply can be increased over time by locating alternative sources, investing in an
expansion of production capacity, or developing competitive products which can substitute. One
might therefore expect that the price elasticity of supply will be greater in the long term than the
short term for such a good, that is, that supply can adjust to price changes to a greater degree over a
longer time.
This applies to the demand side as well. For example, if the price of petrol rises, consumers will find
ways to conserve their use of the resource. However, some of these ways, like finding a more fuel–
efficient car, take time. So consumers as well may be less able to adapt to price shocks in the short
term than in the long term.

The Questions Macroeconomics / Microeconomics
Principles of Macroeconomics / Microeconomics
Your Name:___Yurui Yao_____________________
Instructor: Jim Borer, MBA
Homework Assignment #3 due by 11:59 PM on February 7 (100 points)
Part 1: Answer the following multiple choice (MC) questions (you may highlight, bold, or enter a
letter in the blank – 2 points each):
1. __D____ If the price of a sub sandwich increases by 2% and the quantity demanded falls by 5%,
then there will be
a. an increase in the price elasticity of demand. b. an increase in the price elasticity of supply . c. a
shift in the demand curve. d. a decrease in revenue.
2.___A___If an increase in the price of a good leads to no change in the quantity demanded, then
the demand for the good is
a. perfectly ... Show more content on Helpwriting.net ...
d. both a and b.
15. ___C____ Cross–elasticity of demand
a. will be positive for substitutes like cabbage and lettuce when the price of cabbage goes up. b. will
be negative for complements like SUVs and gasoline when the price of gasoline goes up c. both a
and b d. none of the above.
Part 2: Answer the following questions (insert your answers directly below each question): 1. How
does tax revenue generated on a product with inelastic demand compared to the tax revenue
generated on a product with elastic demand? Why the difference? (page 86) (10 points)
A tax imposed on a good that has an inelastic demand will generate more tax revenue than a tax on a
good with elastic demand, assuming similar supply conditions. If the good's demand is more elastic,
that means its demand is more sensitive to a price increase. There, the price increase due to the tax
will cause quantity purchased and tax revenue to be less than the revenue on a product with inelastic
demand.
2. What is the relationship between elasticity or inelasticity of demand and who bears the most
burden (customer or business) of a tax on various products/services (see pages 84 and 85). (10
points)
The more inelastic the demand relative to supply, the more tax burden the customer will bear. For
gas, in the short term, customer will cut back somewhat, but they still need gas (inelastic demand),
so they will bear most of the expense. If demand were elastic, they could walk

Economics Elasticity Essay
Businesses know that they face demand curves, but rarely do they know what these curves look like.
Yet sometimes a business needs to have a good idea of what part of a demand curve looks like if it is
to make good decisions. If Rick's Pizza raises its prices by ten percent, what will happen to its
revenues? The answer depends on how consumers will respond. Will they cut back purchases a little
or a lot? This question of how responsive consumers are to price changes involves the economic
concept of elasticity.
Elasticity is a measure of responsiveness. Two words are important here. The word "measure"
means that elasticity results are reported as numbers, or elasticity coefficients. The word
"responsiveness" means that there is ... Show more content on Helpwriting.net ...
When it is greater than one, economists say that demand is elastic.
Products which have few good substitutes generally have a lower elasticity of demand than products
with many substitutes. As a result, more broadly–defined products have a lower elasticity than
narrowly defined products. The price elasticity of demand for meat will be lower than the price
elasticity of pork, and the price elasticity for soft drinks will be less elastic than the price elasticity
for colas, which in turn will be less elastic than the price elasticity for
Pepsi.
Time plays an important role in determining both consumer and producer responsiveness for many
items. The longer people have to make adjustments, the more adjustments they will make. When the
price of gasoline rose rapidly in the late 1970s as a result of the OPEC cartel, the only adjustment
consumers could initially make was to drive less. With time they could also move closer to work or
find jobs closer to home, and switch to more fuel–efficient cars.
The concept of elasticity can help explain some situations that at first glance may seem puzzling. If
American farmers all have excellent harvests, they may have a very poor year financially. They may
be better off if they all have mediocre harvests. If a bus company decides it needs more revenue and
tries to get it by raising fares, its revenues may decrease rather than increase.
Inelastic Demand

Supply and Demand and Frequent Buyer Program
Chapter 2 Problem 16: You are an assistant to a senator who chairs an ad hoc committee on
reforming taxes on telecommunication services. Based on your research, AT&T has spent over
$15 million on related paperwork and compliance costs. Moreover, depending on the locale, telecom
taxes can amount to as much as 25 percent of a consumer's phone bill. These high tax rates on
telecom services have become quite controversial, due to the fact that the deregulation of the
telecom industry has led to a highly competitive market. Your best estimates indicate that, based on
current tax rates, the monthly market demand for telecommunication services is given by Qd =250 –
5P and the market supply (including taxes) is Qs = 4P – 110 (both ... Show more content on
Helpwriting.net ...
The manager knows her products are normal goods. Given this information, construct the budget set
for a consumer who has $150 to spend on bagels and other goods throughout the year. Does
Einstein's frequent buyer program have the same effect on the consumption of its bagels that would
occur if it simply lowered the price of one dozen bagels by 3 percent? Explain. Answer: The
reduction in price effects some groups that are buying bagels. The ones who are effected are the
ones who wants to spend below the 10 bagel limit for their budget. It also effects the people who are
buying between 10–19 (getting 20–29) and the ones who are buying between 20–29 (getting 40–49).
Since they get more from buying. It effects all since it is a normal good. Chapter 5 Problem 11 In an
effort to stop the migration of many of the automobile manufacturing facilities from the Detroit area,
Detroit's city council is considering passing a statute that would give investment tax credits to auto
manufacturers. Effectively, this would reduce auto manufacturers' costs of using capital and high–
tech equipment in their production processes. On the evening of the vote, local union officials
voiced serious objections to this statute. Outline the basis of the argument most likely used by union
officials. (Hint: Consider the impact that the statute would have on auto manufacturers' capital–to–
labor ratio.) As a representative for one of the automakers, how would

Price Elasticity of Supply
Price Elasticity of Supply * Price Elasticity of Supply: * The degree of price elasticity of supply
depends on how easily – and therefore quickly – producers can shift resources between alternative
uses. Unlike PED, there is no Total Revenue Test for Price Elasticity of Supply. * Because there is a
direct relationship between Price & Total revenue, they always move together.
DETERMINANT OF PRICE ELASTICITY OF SUPPLY: TIME!
THREE PERIODS: Market period––> short run ––> long run * Price Elasticity of Supply: the
Market Period: The period that occurs when the time immediately after a change in market price is
too short for producers to respond with a change in quantity supplied. * Suppliers cannot be picky ...
Decrease | Decrease | Indeterminate | Decrease |
The Price–Elasticity Coefficient and Formula: * Price elasticity of demand = consumers'
responsiveness/sensitivity to a product's price change * A product is elastic if a small change in its
price elicits very large changes in the quantity demanded. * * Movement on the demand curve ex.
products that are not required in people's daily lives are often elastic products. (not necessity but
luxury) * A product is inelastic if a big price change elicits very little influence on the quantity
demanded. * Minimal movement on the demand curve * ex. products that are required in people's
daily lives are often inelastic products. (not luxury but necessity)
It is important to keep in mind that elasticity involves percentage change in price and quantity
demanded; not absolute change.
Midpoint Formula for calculating elasticity: * We use the formula in computing the price–elasticity
coefficient. * Ex: A change of $4–$5 along a demand curve is a 25% increase, but the opposite price
change from $5–$4 along the same curve is a 20% decrease. Since elasticity should be the same
whether price rises or falls, the midpoint formula is needed. * This formula simply averages the two
prices and the two quantities as the reference points for computing the percentages. * Ex: the
reference point for the

T 's Jean Shop sells designer jeans. The latest trend setter has been Capri cuffed blue jeans. The
demand for the Capri jeans has been very high with teenagers and young women. The business has
increased its supply of Capri jeans due to the high demand. The owner, Terri Johnson, contemplates
increasing the price from $9.00 to $10.00. Ms. Johnson needs to know the response of the
consumers to the increased price. According to McConnell and Brue (2004), the Price Elasticity of
Demand measures the rate of response of quantity demanded due to a price change (p. 1).
Using Price Elasticity of Demand
In calculating the Price Elasticity of Demand, we use the formula:
percentage change in quantity ... Show more content on Helpwriting.net ...
The negative sign (minus sign) is always ignored when analyzing price elasticity, so the Price
Elasticity of Demand is always positive (McConnell & Brue, 2004, p. 2). In the case of T 's Jean
Shop, the Capri pants calculated the price elasticity of demand to be 2.4005, which means the Capri
jeans are elastic and the demand is very sensitive to the price change. Ms. Johnson wants to
determine if any determinants and also how consumers are responding to a change in their income,
which is measured by the Income Elasticity of Demand.
Income Elasticity of Demand
T 's Jean Shop has no affect by determinants, except for substitute goods. Ms. Johnson has been able
to substitute the designer jeans and Capri pants look with a good generic quality from her supplier in
Mexico. However the shop needs to look how the new 10% salary increase by Louisiana State
University workers may affect demand for the Capri pants. According to McConnell and Brue
(2004), this is done by using the measurement, Income Elasticity of demand, which calculates as
follows (p. 16). percentage change in quantity demanded Ei = percentage change in income
Using the equation byEconomics.about.com, calculating the income elasticity of demand when
consumer 's income changes from 3% to 10% salary increase you have to calculate The percentage
of change in quantity demanded

Price Elasticity of Demand and Supply
Q. Discuss how a supplier of a product that is currently fashionable might use both of these concepts
in making price and output decisions.
The price elasticity of demand measures the sensitivity of the quantity demanded to price. The price
elasticity of demand is the percentage change in quantity demanded brought by a 1 percent change
in price. The value of price elasticity of demand for a normal good must always be negative,
reflecting the fact that demand curves slope downward because of the inverse relationship of price
and quantity.
The price elasticity of demand can be an extremely useful piece of information for business firms,
nonprofit institutions, and other organizations that are ... Show more content on Helpwriting.net ...
The price elasticity of supply tells us the percentage change in quantity supplied for each percent
change in price. The value of price elasticity of supply for a normal good must always be positive,
reflecting the fact that supply curves slope upward because of the positive relationship of price and
quantity.
Similarly as price elasticity of demand, price elasticity of supply can be also an extremely useful
piece of information for business firms in deciding how much to produce their products. To see why
a business might care about the price elasticity of supply, let's consider how an increase in price
might affect a business's total revenue. Since price and quantity have a positive relationship in price
elasticity of supply, a higher price will generally mean producing at a higher quantity, so the total
revenue will increase. Economists have classified the possible range of values for price elasticity of
supply as 'Inelastic Supply, 'Unitary Elastic Supply, and 'Elastic Supply'. In the process of helping a
supplier of a product that is currently fashionable to decide output decision, we must first identify
the classification that the product is in right now as being 'fashionable'. As mentioned earlier, the
price elasticity of supply is used to see how sensitive the supply of a good is to a price change. The
higher the price elasticity, the more sensitive producers and sellers are to price changes. A very high
price elasticity suggests

Price Elasticity Of Demand Between All Nike Shoes
This article will focus on the comparison of price elasticity of demand between all Nike shoes sold
in Canada and all breads sold in Canada. I argue that all Nike shoes sold in Canada have a higher
price elasticity of demand than all breads sold in Canada due to three factors: the availability of
substitute goods, necessity and percentage of income.
The first factor is the availability of substitute goods, which are goods that can be utilized instead of
the original good. If there is a substitute good available, the demand is likely to change more
because people can buy different products. On the contrary, if an item has few substitute goods, it
may not gain or lose customers. In Canada, Nike shoes have lots of substitute goods like Adidas ...
If the product coast a large percentage of the average consumer's income, people will pay more
attention to sale prices because they may be afraid of a fact that if the price keeps rising, they can't
afford it because it is expensive and costs most of their income. It is common that we spend more
than $200 on one pair of Nike shoes, which are quite expensive. However, the price of bread is low.
Furthermore, one pair of Nike shoes costs more percentage of clients' income than a piece of bread.
If the price declines, people would like to buy more Nike shoes because they can't afford it in
normal time. However, people won't buy too much bread than before because the bread may go
rancid quickly. So people are more sensitive to the price of Nike shoes. As a consequence, all Nike
shoes sold in Canada have more elasticity than all bread sold in Canada.
Unlike the price elasticity of demand, the price elasticity of supply plays an important role on how
producers respond to the change in price. I argue that all bread sold in Canada has more elasticity
than all shoes sold in Canada owning to three main factors, which are the availability of raw
materials, length and complexity of production and mobility of factors.
First, the availability of raw materials has an influence on raw materials because for more available
goods, producers are always more willing to increase production

Distinguish Between Price Elasticity of Demand, Cross...
Title: Distinguish between price elasticity of demand, cross elasticity of demand and income
elasticity of demand. What actions might be taken by countries and companies to reduce or limit
price fluctuations?
Class: Business J
Student: Ibrokhim Parviz
Student ID: 99592
Tutor name: Sally
Word account:
Introduction:
Nowadays in modern developed market change in prices and other factors are very expected. The
change in one of the factors for instance price and effect of it on another factor like demand or
supply are measured by elasticity. Elasticity is the measure of how the change in one of the factor
will be affected on the other factors. Elasticity measures extent to which demand will change.
Measure easily can be calculated in ... Show more content on Helpwriting.net ...
Calculate the price elasticity of supply.
Solution: 20/10=2, so product is elastic.
Elastic demand curve of the Good X
P
P1
Price
/
0 Q Q1 Quantity
The prices of commodity goods are going up and down. The reason of price fluctuation is changes
in supply or demand. Equilibrium in price find when supply and demand will intersect each other.
The change in one of them will cause price fluctuate. For instance the problem with supply may
cause poor harvest or loss in production. Change in demand can be caused by change in technology,
income or substitutes (Parkin 2010). Mostly in agricultural or commodity markets there is large
price fluctuation in price in very short time. This can give negative impact on producers, for instance
they may have over or under production in short term; or calculate over or under investment in long
terms. Also prices can be too high for essential goods, like bread or rice, problem with this goods
can cause a disorder in country caused by young adults which not satisfied with high prices, similar

situation was in Egypt in 2011. On the other hand prices can be too low, for instance cigarettes, its
generally known that smoking harms health, governments to protect citizens making new rules, for
which they spend money, for that reason it can make negative impact on governments economic.
Another

Price Elasticity : Supply And Demand Model
Price Elasticity
Introduction: The business analysts put forth a great deal of subjective expressions about how
consumers as well as producers carry on. The law of demand expresses that the good quantity that is
demanded or services for the most part declines, and the law of supply expresses the quantity of the
good which is produced has a tendency to increase at the business sector cost of that increase in
good. These laws don 't catch everything that financial analysts might want to think about the supply
and demand model, so they created quantitative estimations, for example, flexibility to give more
insight about business sector conduct.
It is, indeed essential in a great deal of circumstances to see subjectively as well as ... Show more
Price elasticity is generally negative, as indicated in the above sample. That implies that it takes
after the law of demand; as price increases the demand for quantity decreases. As gas price goes up,
the quantity of demanded gas will go down. Eg: positive price elasticity can be found in case if
caviar. The purchasers of caviar are for the most part well off people who trust that the more costly
the caviar is, the better it must be. Accordingly, as the cost of caviar goes up, the amount of caviar
requested by rich individuals goes up also. [2] The Range of Responses: The level of reaction of
quantity requested to an adjustment in cost can vary extensively. The key point for measuring
elasticity is whether the co–efficient is more prominent or not exactly proportionate. When the
quantity which is demanded change proportionately then the estimation of PED is 1, which is called
'unit elasticity '. Thus, PED can be:
1, which means PED is elastic.
Zero (0), which is inelastic.
Infinite (∞), which is exactly elastic
PED and Revenue: There is an exact numerical association in the middle of PED and an association
's revenue. There are three "sorts" of income:
1. Total revenue (TR) which can be calculated by multiplying price with the sold quantity (P x Q)
2. Average

Essay Supply and Demand and Price Elasticity
Technical Problem 10 Chapter 6 10. Use the figure below to answer the following questions: a.
Calculate price elasticity at point S using the method E=ΔQ × P ΔP Q E=ΔQ P+ 90 100 ΔP × Q=
−300× 60 =−0.5 b. Calculate price elasticity at point S using the method E=P P−A E=P × 100 = 100
=−0.5 P−A 100−300 −200 c. Compare the elasticities in parts a and b. Are they equal? Should they
be equal? The values of E in parts a and b are equal, as they should be, because the two methods are
mathematically equivalent formulas for computing price elasticity. d. Calculate price elasticity at
point R. E= P × 400 = 400 = −1. 33 P−A 400−700 −300 e. Which ... Show more content on
Helpwriting.net ...
The results of this estimation are as follows: DEPENDENT VARIABLE: Q R–SQUARE F–RATIO
P–VALUE ON F OBSERVATIONS: 24 0.8118 28.75 0.0001 VARIABLE PARAMETER
ESTIMATE STANDARD ERROR T–RATIO P–VALUE INTERCEPT 68.38 12.65 5.41 0.0001 P –
6.50 3.15 –2.06 0.0492 M 0.13926 0.0131 10.63 0.0001 PR –10.77 2.45 –4.40 0.0002 a. Is the sign
of bˆ as would be predicted theoretically? Why? The theory of demand predicts that price and
quantity demanded will be inversely related. Since b is negative, the estimate of b is consistent with
economic theory. b. What does the sign ĉ of imply about the good? Since cˆ is positive, the good is a
normal good. c. What does the sign of dˆ imply about the relation between the commodity and the
related good R? A negative coefficient of the price of related good R means that the price of R and
the quantity of X demanded are inversely related. In other words, X and R are complements. d. Are
the parameter estimates â, bˆ, ĉ, and dˆ statistically significant at the 5 percent level of significance?
The p–values show all parameter estimates are significant at the 5 percent level, or better. e. Using
the values P = 225, M = 24,000, and PR = 60, calculate estimates of Q = 68.38 – 6.50(225) +
0.13926(24,000) – 10.77(60) = 1,302 (1) The price elasticity of demand (Ê). Qˆ = bˆ(P/Q) = –
6.50(225/1,302) = –1.12 (2) The income elasticity of demand

Price Elasticity and Supply & Demand Price Elasticity and...
Associate Level Material Appendix B Price Elasticity and Supply & Demand Fill in the matrix
below and describe how changes in price or quantity of the goods and services affect either supply
or demand and the equilibrium price. Use the graphs from your book and the Tomlinson video
tutorials as a tool to help you answer questions about the changes in price and quantity Event
Market affected by event Shift in supply, demand, or both. Explain your answer. Change in
equilibrium Frozen orange crops in California Orange juice Supply (left)–Not as many available
oranges to offer consumers. Price will increase and quantity will decrease. Hurricanes in the Gulf
Coast Seafood Supply (left) Not as much seafood to supply stores and ... Show more content on
Helpwriting.net ...
References Mankiw, N. (2007). Principles of Economics. Mason, OH: South–Western Cengage
Learning. Associate Level Material Appendix B Price Elasticity and Supply & Demand Fill in the
matrix below and describe how changes in price or quantity of the goods and services affect either
supply or demand and the equilibrium price. Use the graphs from your book and the Tomlinson
video tutorials as a tool to help you answer questions about the changes in price and quantity Event
Market affected by event Shift in supply, demand, or both. Explain your answer. Change in
equilibrium Frozen orange crops in California Orange juice Supply (left)–Not as many available
oranges to offer consumers. Price will increase and quantity will decrease. Hurricanes in the Gulf
Coast Seafood Supply (left) Not as much seafood to supply stores and restaurants for consumers.
Prices will increase as quantity decreases. Cost of cotton decreases Clothing The supply of cotton
fabrics does down Prices of fabric will go up until the quantity of cotton crops go up. Technology
improves efficiency in pasta manufacturing Pasta Supply of pasta will increase due to the
improvements in technology. Prices decreases and quantity increases 1. What do substitutes refer to
in economics? Give an example of two substitutes. Substitutes refer to pairs of goods that are used
in place of each other. Our reading gives us a good example of hot fudge and ice cream. If the

Elasticity of Demand
chapter four
Elasticity of Demand and Supply
CHAPTER OVERVIEW
This is the second chapter in Part Two, "Price, Quantity, and Efficiency." Both the elasticity
coefficient and the total revenue test for measuring price elasticity of demand are presented in the
chapter. The text attempts to sharpen students' ability to estimate price elasticity by discussing its
major determinants. The chapter reviews a number of applications and presents empirical estimates
for a variety of products. Income elasticities of demand, and price elasticity of supply are also
addressed.
INSTRUCTIONAL OBJECTIVES
After completing this chapter, students should be able to:
1. Define price elasticity of demand and compute the coefficient of ... Show more content on
Helpwriting.net ...
Absolute changes depend on choice of units. For example, a change in the price of a $10,000 car by
$1 and is very different than a change in the price a of $1 can of beer by $1. The auto's price is rising
by a fraction of a percent while the beer rice is rising 100 percent. b. Percentages also make it
possible to compare elasticities of demand for different products. 5. The midpoint formula for
elasticity is: Ed = [(change in Q)/(sum of Q's/2)] divided by [(change in P)/(sum of P's/2)] a. Have
the students calculate each of the percentage changes separately to determine whether the demand is
elastic or inelastic. After the students have determined the type of elasticity, then have them insert
the percentage changes into the formula. b. Students should practice this using numbers you
provide, or using the table in end– of–chapter question 4–2. 6. Because of the inverse relationship
between price and quantity demanded, the actual elasticity of demand will be a negative number.
However, we ignore the minus sign and use absolute value of both percentage changes. D.
Interpretations of Ed 1. If the coefficient of elasticity of demand is a number greater than one, we
say demand is elastic; if the coefficient is less than one, we say demand is inelastic. In other words,
the quantity demanded is "relatively responsive" when Ed is greater than 1 and "relatively
unresponsive" when Ed is less

Supply & Demand, and Price Elasticity
Supply & Demand, and Price Elasticity
All things in our society are connected in some way, for example, how humans relate to each other.
Complex ideas and analysis are not without their own set of unique connections. The intricate
theories of economics are a prime example of this connection. To gain an accurate understanding of
how supply and demand are connected, and its role within the market, one must analyze the
functions of each as separate entities, and how they relate to economics as a whole.
To begin analysis, one must examine what causes change between supply and demand. Once this
has been achieved, investigating how changes in price and quantity influence market equilibrium,
and how the necessity of a good and the availability ... Show more content on Helpwriting.net ...
If the price of the good goes up, the consumer will buy less of the good, if the price of the desired
good decreases, the consumer will purchase more of that good. This concept applies to all the
variables listed above. A change in price in either direction is going to affect the consumer's decision
to acquire the good. A good way to look at all the variables is isolating each variable to determine
the effect of each with respect to the elasticity price. The key to elasticity is that it is a unit–less
measure. The exact number of units does not matter; the ratio of the percentage changes in quantity
divided by the percentage change in price.
Additionally, time and budget percentages are variables of elasticity price. The longer a consumer
has to look for an option to buy the good will determine the effect of the result to elasticity price. A
product that requires a large percentage of the consumer's budget will make the good elastic. The
above variables are examples of how necessity of a good can affect the price elasticity of a product.
A competitive market is a group of buyers and sellers of a particular good or service which the
individual buyer or seller has no impact on the price of the traded good or service. In the market
there are two main systems: demand curve and supply curve. The demand curve shows the
relationship between the prices of a good or service that consumers are willing and

Supply, Demand & Price Elasticity
Supply, Demand and Price Elasticity
People and companies make economic decisions on a daily basis by deciding how much of
something they will buy and what prices they are willing to pay for the goods or services. Through
individual decision–making, consumers determine supply demands for their needs and wants, and
companies decide which goods and how many goods are to be sold, and how much to charge
consumers. There are many fundamental concepts and definitions that are important to
understanding the economics. The concepts that will be discussed in this paper are supply, demand,
and price elasticity.
Demand Variables Demand is defined as the amount of a good or service that consumers are willing
and able to purchase (Hubbard & ... Show more content on Helpwriting.net ...
According to Hubbard and O'Brien, these technological changes are usually positive changes for the
company and help them find ways to make their inputs go farther, or cost less. The price that other
companies are charging for substitutes will also affect supply. If a substitute product has a low price,
consumers are more likely to go with that product. Many times, companies are forced to lower their
prices to compete with comparable products. The number of companies that enter the market
changes the supply as well. More companies in the market mean more comparable products will be
produced. Companies also look at future price expectations when deciding how much to supply. If
economists predict that prices will increase in the future, it benefits the company to withhold some
of the supply. Walt Disney Films does this with their VHS/DVD collections. They keep their movies
in a 'vault' and re–release them every few years. Disney has created demand for their product due to
the limited release and availability of their product. Companies should increase production when
they can charge more for their product, as they can lose money if they are slow to respond to
demand.
Market Equilibrium
The purpose of the market is to bring buyers and sellers together, with the interaction between the
two leading to production of what consumers want most. This is also known as

Production Cost Of Production Costs
Production costs. According to Wagner (2008) oil is grated by its viscosity (light to heavy) and by
the amount of impurities it contains (sweet to sour). The heavy/sour crude is more available, but less
preferred as it contains impurities and needs more processing to refine into gas. The cost of
processing heavy/sour crude oil is high; this is why the price of sweet/light crude oil is much higher
than heavy/sour crude oil. So, high production costs of gas make the supply elasticity lower.
Transportation costs. States that are farther from the source of supply will have higher prices
because of high transportation cost. State or companies have to invest in technology as tankers,
pipelines, blending terminals etc.
Technology. Getting out of ground and processing crude oil need high capital investment in
technology. Investing in new technology would result in easier and faster production i.e. in elastic
supply, but the high cost of it makes the supply less elastic.
2.2 The factors that affect gas demand
Elasticity of demand explains buyer behavior in response to price changes. An elastic gas demand is
when buyers can easily buy less when the price is higher and more when the price is low. But when
the demand is not elastic, they can because air pollution and stimulate alternative energy, it is better
for the consumer to substitute gas with other energy sources that are environment friendly. This
confusion leads to an inelastic gas demand in the short–term, but elastic in the

Universal Car Rental Pricing Simulation (Havard Busines...
Havard Business SCHOOL PAPER: Universal Car Rental Pricing Simulation
July 2012
Universal Car Rental Pricing Simulation
Background:
The objective of the simulation was to maximise profits of Universal Car Rental Company. The
simulation was run across three cities in Florida; Tampa, Orlando and Miami.
Overall strategy:
We adopted a strategy of offering the highest price achievable whilst maintaining 100% capacity
utilisation irrespective of market share. In the context of the scenario, where growth in demand
outstripped supply and with only twelve 'rounds', we felt market share was not fundamentally
important. In respect of setting the pricing level, we calculated the price elasticity of demand to give
us an insight into the ... Show more content on Helpwriting.net ...
Each city had a different revenue mix between business and leisure users. Tampa had more business
users, Orlando and Miami had more business and leisure users compared to Tampa. In Orlando and
Miami, business users were more price insensitive compared to Tampa. Therefore, along with
maximising our capacity utilisation we increased weekday prices at a higher rate in Orlando and
Miami compared to Tampa. Table 2 confirms this, as it shows the percentage contribution of
weekday car hires as a percentage of the overall contribution of each region. It indicates that
weekday car hires account for a Florida grand total of 81% of contribution in October but this rises
to 85% by December. In Orlando it is lower because the relatively higher contribution of weekend
customers in that market.
Table 2: Percentage contribution of weekday car hire to overall contribution
All pricing decisions the team took are recorded in detail in appendix A, B and C. A summary of the
same is presented in figure 1 below. Decisions were made with an informed understanding of the
elasticity of demand, fleet utilisation, the gross profit, the contribution, the net profit, seasonal
demand changes, the competitors pricing decisions and the context of the scenario.
After a few months of detailed scrutiny of the numbers, we were able to make pricing decisions
more quickly by using the breakeven change in volume to set the new price. Based on our broad

Supply, Demand, and Price Elasticity Paper – Rice. ECO / 212: Principle of Economics Week 2
Learning Team Assignment With the growing cultural diversity in the San Francisco bay area, it is
hard not to notice the Asian cuisines and restaurants in every corner of the block. Asian food had
become a natural substitution choice for the American fast food; and rice, is the perfect substitution
for wheat and flour. Rice is the seed of the monocot plant "Oryza sativa". As a cereal grain, it is the
most important staple food for a large part of the world 's human population, especially in East and
South Asia, the Middle East, Latin America, and the West Indies. It is the grain with the second–
highest worldwide production after corn. In this ... Show more content on Helpwriting.net ...
Rice is considered to be a Griffin good. Griffin goods are inferior goods which have an upward
sloping demand curve. The income effect is greater than the substitution effect. Normally with
inferior goods, the income effect will cause the consumers to demand less of a good. The
substitution of rice as the cost decreases, are other foods which are not normally available to poor
consumers. If the cost of rise is lower, the consumer buys less and spends his or her additional
income on foods which are preferable but not as affordable (Hubbard, & O'Brien, 2010).
Insulin, however, would not show the same results as rice. Insulin, as a necessity, would keep the
same demand if the price lowered or increased. If the cost of insulin decreased then it is likely to see
an income effect for other goods purchased by diabetic consumers. The consumer would in a sense,
have an increase of income. If the cost of the insulin increased the consumer demand would still
remain the same but would need to decrease the demand for other goods. Next time when we go to
an Asian restaurant and decided to have a rice dish, stop for a second and think about these
questions; is the current world supply enough to fulfill the demand? Is the supply of grain and corn
affecting the current price? What will the price be if there are shortage of supply and surplus of
demand and how that would affect the

Elasticity: Supply and Demand and Price
Price elasticity is an important concept to understand when beginning and maintaining a business
that distributes goods or services. Elasticity is the economic concept that estimates when products
should be introduced to consumers, and how (provided that all other variables remain constant)
demand or supply will be affected by changes in the environment that affect price (Basic
Economics, 2007–2010). Depending on how the percentage demanded/supplied is affected by price
differentiation will determine whether or not a good or service is considerably elastic or inelastic,
providing a sound guideline for business owners. The higher the elasticity, the more the demand will
change if the price varies in the competitive market. Elasticity ... Show more content on
Helpwriting.net ...
If a price of a book increases by 10% and the quantity supplied increases by 20%, this means that
the price elasticity would be 2, meaning that price has little bearing on quantity supplied. Out of
these three products and services, the hotel room would be the least elastic, and the book would be
the most elastic. There are a number of factors that can impact the elasticity of a product. How
necessary an item is, how large or small the expenditure is, how long the product has been out and
the numbers of substitutes on the market are all components that will effect on how much demand
will change. A bridge toll will be inelastic, meaning the number of people wanting it will not
change, because it may be a necessity expense for travel, there may be few alternative routes, and it
may be just a few cents for each consumer (Basic Economics, 2007–2010). College tuitions are
more inelastic. Our society has deemed it necessary to have a degree. Regardless if tuition increases,
the demand will stay relatively the same. There are few alternatives to having a college degree and
therefore the market is more limited. Price fluctuation will not impact consumer demand
extensively, therefore it would be considered inelastic. A bridge toll can be considered inelastic

Essay On Tuition
The prompt for this assignment is "You have been hired by Nobody State University (NSU) as a
consultant to help the university with how to increase their total revenue. The university has been
struggling in recent years, so they have hired you to help them in their last attempt to find an
appropriate solution so that the university can survive. Raise or lower tuition? Suppose that, in an
attempt to raise more revenue, Nobody State University increases its tuition" (Amacher & Pate,
2013). By looking at a raise in tuition and determining if it will have any higher revenue, describing
the conditions on whether revenue will increase, decrease or remain the same, how the process of
revenue is at Nobody State University, how the relationships ... Show more content on
Helpwriting.net ...
Slowing costs and low inflation have moderated tuition increases in recent years, but the
relationships and tends remain the same".
Describe the conditions under which revenue will (a) rise, (b) fall, or (c) remain the same, and
explain the process of revenue at NSU, focusing on the relationship between the increased revenue
from students enrolling at NSU despite the higher tuition and the lost revenue from possible lower
enrollment.
With a slight increase in tuition, revenue would also increase. Many students and families would see
a slim increase in tuition as fair, where it would result in them paying slimmer higher amounts,
which would increase revenue. If NSU did nothing at all, then revenue would decrease. If the
economy was in a recession, then this would have an impact on revenue. It would decrease. If the
University stayed the same way, then revenue would more than likely remain the same. There are
instances where revenue will rise, fall or remain the same. It is left up entirely to the people that
have to go to school. The school's officials are the ones that will make the choices and the families
and students will have to
If the true price elasticity were (–1.2), discuss what you would suggest the university do to expand
revenue.
"The concept of elasticity of demand is also applicable to supply schedules and supply curves. Price
elasticity

Developing A Digital And Sharing Economy, Platform...
INTRODUCTION Technological advancements spurred the creation of a digital and sharing
economy. It is easier than ever for two people from different locations to connect and do business
with one another. With the evolvement of the sharing economy, a smartphone application by the
name of Uber has been born and is a potential monopoly in the making. This essay aims to answer
the following question: What growth strategies have Uber used in the market and what impact do
these strategies have on the market? To answer this question the author will examine Uber role in
the sharing economy, platform development strategies and pricing schemes used by Uber, and
Uber's impact on the car ownership industry. Many of these themes such as pricing ... Show more
Uber is a thus a multi–sided platform, or in other words acts a digital location where buyers and
sellers meet. Since it is a multi–sided platform connecting two parties, Uber is only valuable if their
is a significant number of both parties in the platform. The firm which has the highest number of
install base will increase its value and at the same time decrease its competitor's company value.
THEORY OF NETWORK EXTERNALITIES AND PLATFORM DEVELOPMENT STRATEGIES
The theory of network externalities exists when the benefit a user has from consuming a product
increases as the number of users of that product increases; The value of the company increases as
the number of users of the product increases. Uber is faced with these direct network effects. Drivers
want to be with the application that has the most customers so that they can minimize waiting time,
and customers want to be with the application with the most drivers so they can also minimize
waiting time for a car. Thus, as the number of customers and drivers get big enough, it will be
almost impossible for any firm to come in the market and compete with Uber. Uber will become a
monopoly and can dominate the market. In order to become a monopoly, the install base must be
large enough. Uber is the loss leader and has set their car prices very low, below the rates of most
taxis around the world. The reason for this is that the lower the price, the lower the tipping point or
in other words Uber

Tobacco And The American Revolution

Recommended

Recommended

More Related Content

Similar to Tobacco And The American Revolution

Similar to Tobacco And The American Revolution (6)

More from Mandy Cross

More from Mandy Cross (20)

Recently uploaded

Recently uploaded (20)

Tobacco And The American Revolution