Economic Assignment Case Studies Analysis
Question: 01
Change in price is -25% and difference between demand is 5% So the Elasticity of the bacon is -0.20%.
is Elasticity of the bacon is calculated by change in demand percentage divided by change in price.
it supports the option number E means the prices of bacon is elastic they are change which affect the demand and revenue of the product line.
Question: 02
Price Elasticity
price elasticity is simply defined as the change occurs in the supply and demand directly affect the prices positively or negatively that difference in prices known as price elasticity.
Through price elasticity we can easily calculate the price sensitivity of the customers.
Income elasticity can be negative with decrease in the demand of bacon with increasing prices.
With price elasticity we can find normal goods in the market.
Through Income elasticity we can find inferior goods and a variety of goods also.
Through price elasticity we can find the number of substitutes.
Price elasticity is rare that why we can find compliments.
Bacon has the price Elasticity it means that the bacon is the good in substitute and also good in compliment.
Question: 03
if the increase the price of bacon it will increase the revenue of the bacon surely because increase in prices also increase the portion of revenue. if the situation is increase in prices with decrease in demand in this situation the bacon can also increase the revenue because price is best indicator for increasing revenue.
Question:04
in this situation the option number three is right the McGuffins are the price sensitive that can be the reason of the lowering demand because increase in prices decrease the rate of demand according to the law of demand and price....
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