This document presents the results of a study measuring the price elasticity of demand for tea and sugar in Bangladesh. Data on price and quantity demanded for tea in 2016 and 2018 and for sugar in the same years was collected from a local shop. The price elasticity of demand was calculated to be 0.50 for tea and 0.94 for sugar using the percentage change in quantity demanded over the percentage change in price. This indicates that demand for both tea and sugar is inelastic, though sugar has a more elastic demand. The conclusion is that sugar shows a comparatively more elastic demand than tea.
Macro Economics
For downloading this contact- bikashkumar.bk100@gmail.com
Prepared by Students of University of Rajshahi
Tanvir Ahmed
Md Mamun Islam
Md Shahidul Islam
Anjon Mojumder
Sadia Afrin
The cross-price elasticity of demand is the degree of responsiveness of quantity demanded of a commodity due to the change in price of another commodity.
demand analysis meaning, objectives, steps in market demand analysis,collection of information. characterization of market, methods of demand forecasting, market planning
Macro Economics
For downloading this contact- bikashkumar.bk100@gmail.com
Prepared by Students of University of Rajshahi
Tanvir Ahmed
Md Mamun Islam
Md Shahidul Islam
Anjon Mojumder
Sadia Afrin
The cross-price elasticity of demand is the degree of responsiveness of quantity demanded of a commodity due to the change in price of another commodity.
demand analysis meaning, objectives, steps in market demand analysis,collection of information. characterization of market, methods of demand forecasting, market planning
Students should be able to:
Carry out diagrammatic analysis of the market structure in both the short and long run
Understand the importance of advertising and differentiation for the model of monopolistic competition and be able to contrast this with other market structures.
Students should be able to explain and evaluate the efficiency of monopolistic competition
This ppt includes product mix for parle, plc for parle-g and parle as a company.
Also includes line filling, line pruning, line stretching, line modernization undertaken by Parle
This ppt will also help you in understanding levels of product
Income elasticity of demand is the degree of responsiveness of quantity demanded of a commodity due to change in consumer’s income, other things remaining constant. In other words, it measures by how much the quantity demanded changes with respect ot the change in income.
Hello Students,
My Slide will help you to understand all about demand analysis and its impact on economic.in what situations demand increases and decreases.contraction and expansion of demand.
Students should be able to:
Carry out diagrammatic analysis of the market structure in both the short and long run
Understand the importance of advertising and differentiation for the model of monopolistic competition and be able to contrast this with other market structures.
Students should be able to explain and evaluate the efficiency of monopolistic competition
This ppt includes product mix for parle, plc for parle-g and parle as a company.
Also includes line filling, line pruning, line stretching, line modernization undertaken by Parle
This ppt will also help you in understanding levels of product
Income elasticity of demand is the degree of responsiveness of quantity demanded of a commodity due to change in consumer’s income, other things remaining constant. In other words, it measures by how much the quantity demanded changes with respect ot the change in income.
Hello Students,
My Slide will help you to understand all about demand analysis and its impact on economic.in what situations demand increases and decreases.contraction and expansion of demand.
Assignment 2 Operations Decision Due Week 6 and worth 300 points .docxsherni1
Assignment 2: Operations Decision Due Week 6 and worth 300 points
Using the regression results and the other computations from Assignment 1, determine the market structure in which the low-calorie food company operates.
Use the Internet to research two (2) of the leading competitors in the low-calorie microwavable food industry, and take note of their pricing strategies, profitability, and their relationships within the industry (worldwide).
Write a six to eight (6-8) page paper in which you:
1. Outline a plan that will assess the effectiveness of the market structure for the company’s operations.
2. Suppose the business operations have now changed from the market structure specified in the scenario. Determine two (2) likely factors that might have caused the change. Predict the primary manner in which this change would likely impact business operations in the new market environment.
3. Analyze the major short-run and long-run production and cost functions for the low-calorie microwaveable food company. Suggest substantive ways in which the low-calorie food company may use this information in order to make decisions in both the short-run and the long run.
4. Determine the possible circumstances under which the company should discontinue operations. Suggest key actions that management should take in order to confront these circumstances. Provide a rationale for your response.
5. Suggest one (1) pricing policy that will enable your low-calorie microwavable food company to maximize profits. Provide a rationale for your suggestion.
6. Outline a plan, based on the information provided in the scenario, that the company could use in order to evaluate its financial performance. Consider all the key drivers of performance, such as company profit or loss for both the short term and long term, and the fundamental manner in which each factor influences managerial decisions.
7. Recommend two (2) actions that the company could take in order to improve its profitability and deliver more value to its stakeholders. Outline, in brief, a plan to implement your recommendations.
8. Use at least five (5) quality academic resources in this assignment. Note: Wikipedia does not qualify as an academic resource.
Your assignment must follow these formatting requirements:
• Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions.
• Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.
The specific course learning outcomes associated with this assignment are:
• Analyze short-run and long-run production and cost functions.
• Apply macroeconomic concepts to changes in global and national economies and how they ...
1Demand and Supply EstimationAssignment 1 Dem.docxjoyjonna282
1
Demand and Supply Estimation
Assignment 1: Demand and Supply Estimation
Your name
Your Instructor’s name
Course Id:
Your Institution’s name
Date:
Imagine that you work for the maker of a leading brand of low-calorie, frozen microwavable food that estimates the following demand equation for its product using data from 26 supermarkets around the country for the month of April.
1. Compute the elasticity for each independent variable.
QD = - 5200 - 42P + 20(600) + 5.2(5500) + .20(10,000) + .25(5000)
Replacing the values of: PX= 600, I=5,500, P=500, M=5,000 and A=10,000
QD= - 5200 – 42(500) + 20(600) + 5.2(5500) + 0.20(10000) + 0.25(5000) = 17,650
Price Elasticity is given by: (Ep) = (P/Q) (∆Q/∆P)
From regression equation we find: ∆Q/∆P = -42.
Therefore, Price Elasticity (Ep) = (P/Q) (-42) (500/17650) = -1.19, likewise,
(Microwave oven’s Elasticity (EM) = (P/Q) (0.25) (5000/17650) = 0.07
Income-elasticity (EI) = (P/Q) (5.2) (5500/17650) = 1.62
Advertisement-elasticity (EA) = (P/Q) (0.20) (10000/17650) = 0.11
Cross- price elasticity ( Ec) = 20(600/17560) = 0.68
2. Determine the implications for each of the computed elasticities for the business in terms of short-term pricing strategies. Provide a rationale in which you cite your results.
Price Elasticity: The Price Elasticity (EP) is – 1.19. It implies that if there is made an increment of 1% in the cost of the item then it will drop the demanded quantity by 1.19%. In this way, it demonstrates that the demanded quantity is elastic in result. Subsequently, it prompts the circumstance that if the wages of the consumers rise then this may push them away.
Microwave Oven Elasticity: The computed elasticity in connection to the microwave ovens in the region is of 0.07, implying that this made an increase of 1% in the quantity of microwaves in the region would bring about an increment in the demanded quantity by .07%.
Income Elasticity: The calculated income elasticity is 1.62. This demonstrates that it brings an increment of 1% of the income of a buyer; it will bring an increment of the demanded quantity of the item by 1.62%. With this perception, we can see that the item is flexible; Hence, causing the organization to increase costs of the item if an income of the buyer increases.
Cross – Price Elasticity: The calculated cross – price elasticity is said to be 0.68. In the event that competitors raise their cost by 1%, it will lead to an increase of the demanded quantity of the item by 0.68%. This makes it be an inelastic behavior of the item demanded to the cost of competitors due to the fact that there are no influences in the sale of the competitors.
Advertisement Elasticity: The computed advertisement elasticity is .11; implying that if there is a 1% increment of the advertisement costs, the increment of the business would lead into an increment of the demanded quantity by 0.11%. This shows that the demanded quantity of the item is inelastic as it relates to t ...
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Measurement of elasticity of demand for tea and sugar.
1. WELCOME TO OUR
PRESENTATION
Measurement of
elasticity of
Demand for Tea
and Sugar.
INTERNATINAL UNIVERSITY OF
BUSINESS AGRICULTURE AND
TECHNOLOGY
Course number : ECO-101
Prepared for :
Faculty, Department of Economics
Sec :
Program : BBA
2. CONTENT
Serial No. Chapter Title. Page No.
01 Introduction 4
02 Analysis Objective 5
03 Methodology 6
04 Demand 7
05 Elasticity of Demand 8
06 Types of Elasticity of
Demand
9
07 Data (For Tea) 10
08 Actual Estimate and
Result
11 & 12
09 Data (For Sugar) 13
10 Actual Estimate and
Result
14 & 15
11 Product Result 16
12 Conclusion 17
2
3. Introduction
• Bangladesh is a small tea producing country with large potential. Tea is a major
agrobased,labour intensive and export-oriented industry of Bangladesh. It plays a
very vital role in the national economy through export earning, trade balancing and
as well as in employment generation. It produces 2% of world production and
exports 3% of world export. It gives 200 million taka as interest against production
and development loan from the tea industry (BTB, 2018). Tea is a very important
cash crop of Bangladesh. A large number of tea estates have been established in
Bangladesh depending on the tea as raw material. But processing and marketing
system of tea are* subdued by manifold problems , which always hamper the
interest of tea producers. A wide range of variations was observed in yield, costs
and returns among.
3
4. Analysis Objective
There are some important objectives for this research.The main objectives of the
present study are given below :
1.To measure the elasticity of demand.
2.To investigate the responsive of quantity demanded of price.
3.To compare elasticity of demand between tea and sugar.
4
5. Methodology
• In order to turn imply and demand into a truly useful tools .we need to know how
much supply and demand responds to the change in price .some purchase like those
for vacation travel are very sensitive to prices changes other likes drink or
electricity are necessities for which consumer purchase respond very little to price
changes. The quantitative relationship between price quantity purchased analyzed
using the crucial concept of elasticity.
5
6. Demand
•By demand we means we demand the various quantities of a given commodity of
services with consumers would be in one market in a given period of time at various
prices at various incomes or at various prices of relies goods. Of demand the amount of
if that a consumer will purchase or will be ready to take off from the market various
given price in a given period time.
•The demand in economics implies both the desires of purchase and the ability to pay
for it.
6
7. Elasticity of Demand
• The Elasticity of Demand is a measure of change in the quantity demanded in
response to the change in the price of the commodity. Simply, the effect of a
change of price on the quantity demanded is called as the elasticity of demand.
• Marshall, a renowned economist, has suggested a mathematical method to measure
the elasticity of demand:
• According to this formula, the elasticity of demand can be defined as a percentage
change in demand as a result of the percentage change in price. Numerically, it can
be written as:
7
8. Types of Elasticity of Demand
• The elasticity of demand measures the relative change in the total amount of goods or services that
are demanded by the market or by an individual. The quantity demanded depends on several factors.
Some of the more important factors are the price of the good or service, the price of other goods and
services, the income of the population or person and the preferences of the consumers. So, we have
several types of elasticity of demand according to the source of the change in the demand. For
example, if the price is the source of the change, we have the “price elasticity of demand”.
• According to the source of the change, the following types of elasticity of demand can
be mentioned:
1. Price Elasticity of Demand
2. Cross Elasticity of Demand (the elasticity in relation to the change of the price of other good
and services)
3. Income Elasticity of Demand
4. Advertisement Elasticity of Demand (the elasticity in relation to the advertisement expenditure)
• According to the degree of the change in the demand, the elasticity can be classified in:
1. Perfectly Elastic
2. Relatively Elastic
3. Unit Elasticity
4. Relatively Inelastic
5. Perfect Inelastic 8
9. Data
300
230
P
Q
2018 (May)
2016 (May)
Price
350 400
Quantity Demand
For Tea
For calculating the price elasticity of demand , we need some data on price quantity .So , we went to
a nearest shop and they provide us some data on quantity of demand and price of tea and sugar .We
get data from a nearest shop in uttara .That’s why we get the fresh data the details are given below :
Year Price (Tea) Quantity(per
day)
2016 (May) 230 400
2018 (May) 300 350
Demand schedule for Tea :
According to this data we get
the following diagram :
9
10. Actual Estimate and Result
• For tea we get the following data
P1 =230 (previous price,2016)
P2 =300 (current price,2018)
Q1 =400 (previous quantity,2016)
Q2=350 (current quantity,2018)
∆P =p2-p1
=300-230
=70
∆Q= Q2-Q1
=350-400
= -50 [ The change in demand shows a negative sign,which can be ignored.]
P = p1+p2
2
= 230+300
2
= 265
10
11. Actual Estimate and Result
Q = Q1+Q2
2
= 400+350
2
= 375
= 50 × 265
70 375
= 0.5047619048
The price of elasticity demand is less then 1. So it has inelastic demand . We can avoid (-0 sign)
because all elasticity are positive . After calculating the elasticity of tea we see that it has inelastic
demand.
11
12. Data
P
Q
2018 (May)
2016 (May)
65
48
30 40
Quantity Demand
Price
For Sugar
•In 2016(May) and the present condition in 2018(May).In the year 2016(May) the price was 48 tk
per kg and now in this year 2018(May) the price is 65 tk per kg.The quantity of selling was 400 kg
per day in the year of 2016 and now due to increase of price the quantity of selling has 300 kg per
day of this shop.
Year Price Tk Quantity(Per
Day)
2016 48 40
2018 65 30
Demand schedule for Sugar :
According to this data we get
the following diagram :
12
13. Actual Estimate and Result
• For sugar we get the following data :
P1 =48 (previous price,2016)
P2 =65 (current price,2018)
Q1 =40 (previous quantity,2016)
Q2=30 (current quantity,2018)
∆P = p2-p1
= 65-48
= 17
∆Q= Q2-Q1
= 30-40
= -10 [ The change in demand shows a negative sign,which can be ignored.]
P = p1+p2
2
= 48+65
2
= 56.5 13
14. Actual Estimate and Result
Q = Q1+Q2
2
= 40+30
2
= 35
= 10 × 56.5
17 35
= 0.9495798319
• The price of elasticity demand is less then 1. So it has inelastic demand .We can
avoid (-0 sign)because all elasticity are positive . After calculating the elasticity of
sugar we see that it has inelastic demand.
14
15. Sugar Product Result
• After calculating Sugar details the result shows that the elasticity of demand of pointed is
almost same as ready. In this case we have found elastic demand.
15
16. Conclusion
• At last , we can say that Sugar shows comparatively more elastic demand thanTea.
16
17. Reference
• Samuelson A. Paul and Nordhus D. William, Economics, nineteen edition,
published by McGRAW-HILL
• Local shop in Uttara.
17