Open Always
Email: support@globalcompose.com Call Now! +1-315 515-4588
Open Always
Email: support@globalcompose.com Call Now! +1-315 515-4588

### A Database of over Million Scholarly Resources. Start your Search Now

#### Question 1 Elasticity Calculations

QD = – 5200 – 42P + 20PX + 5.2I + 0.20A + 0.25M

P= 500

Px = 600

I = 5,500

A = 10,000

M = 5,000

Therefore the   QD = -5200 – 42(500) +20(600) +5.2(5500) + 0.20(10000) + 0.25(5000)

QD = 15,650 units

Elasticity = (slope of the independent variable)-1       * (independent variable /QD)

Price of the product                                       = -42 * 500/17650

= – 1.19

Price of leading competitor’s product                        = 20 * 600/17650

= 0.68

Per capita income                                            = 5.2 * 5500/17650

= 1.62

Monthly advertising expenditures                  = 0.20 * 10000/17650

= 0.113

Number of microwave ovens sold                  = 0.25 * 5000/17650

= 0.071

##### Question 2: Analysis of the Calculated Elasticity

From the above calculations it is evident that the quantity demanded is almost unitary elastic to price of the commodity. This notion is strengthened by the fact that the elasticity calculated in almost one. Hence the prices vary with the quantity demand in almost the same proportion (Gillespie & Gillespie, 2011). This calculation also means that as the prices changes, the quantity demand is deemed to change in almost the same proportion. The negative sign shows that the commodity in question is a normal good. It means that as the firm increases its prices, the quantity demanded is expected to reduce in almost the same proportion. Therefore a one percent increase in the price of this commodity would lead to a 1.19% decrease in the quantity demand for this good (Lipsey & Harbury, 2014).

A closer look at the cross elasticity of the competitor price, the quantity demand is less elastic to the price of the competitor’s goods. This means that a 1% increase in the price of the commodity would lead to a 0.68% increase in the quantity demanded. The change of the quantity demanded therefore is less proportionate to the change effected on the price. It only means again that the competition between these companies also involves non price competition which would revolve around the quality of the good and the efficiency of the delivery of these services (Gillespie & Gillespie, 2011). The positive sign postulated in the elasticity connotes that there is appositive correlation between the price of the competitor and the quantity demanded. It means that a 1% increase in the price of the competitor’s goods leads to a 0.68% increase in the quantity demanded of for the company goods. Hence these two products are substitutes since the increase in price of one leads to increase in quantity demanded for another (Lipsey & Harbury, 2014).

On the account of the income elasticity, the commodity is more elastic to income as shown by the elasticity value which is higher than 1. It means therefore that a specific increase in the income of the individual consumer would lead to a more than proportionate increase in the quantity demanded for the good. Additionally, the positive sign connotes that as the income increases, the level of consumption also increases as depicted by the high quantity of the commodity demanded hence it is deemed to be a normal good (Welch & Welch, 2016).

The elasticity on the number of goods sold and the advertising expenses are quite small and way below 1 which means that they are quite inelastic and hence has minimal effect on the quantity demanded for the good. They therefore cannot be used for price decision making because of their negligible effect on the quantity demanded (Lipsey & Harbury, 2014).

##### Question 3: Recommendation

The company should cut its prices since the prices of the goods are more elastic. From the above calculations it is evident that the quantity demanded is almost unitary elastic to price of the commodity. This notion is strengthened by the fact that the elasticity calculated in almost one. Hence the prices vary with the quantity demand in almost the same proportion (Gillespie & Gillespie, 2011). This calculation also means that as the prices changes, the quantity demand is deemed to change in almost the same proportion. The negative sign shows that the commodity in question is a normal good. It means that as the firm increases its prices, the quantity demanded is expected to reduce in almost the same proportion. Therefore a one percent increase in the price of this commodity would lead to a 1.19% decrease in the quantity demand for this good (Welch & Welch, 2016).

##### Question 4 C Equilibrium Quantities and Price

At equilibrium quantity supplied = quantity demanded

Hence

-42(p) + 38650 = 79.1(p) – 7909.89

-121.1(p) = 46559.89

P = 384.47 cents

Q = 79.1*384.47 – 7909.89

Q = 22,502 units

Question 4 d factors affecting demand and supply

One of the factors that affect the demand and the supply is the price of the commodity. As the company increases the prices of the commodity, the demand for the commodity is expected to reduce since the available amount of cash available amount of cash meant for a specific good is deemed to decrease (Deepashree, 2013). The decrease is attributed to the fact that not the same amount of cash is able to collect the same amount of goods as before. The high prices therefore tend to reduce the purchasing power of the consumers hence creating an advent of reduction in the consumption of the goods. It therefore follows that the prices of goods is indirectly proportional or correlated to the demand for the same goods (Gillespie & Gillespie, 2011).

On the account of the supply, the higher the prices of the goods in question, the higher the supply. The producers have the main goal of maximizing the profit which mainly occurs at the time when the prices are deemed to be high. The high prices induces them to increase their supply hence quantity supplied is usually directly proportional to the prices of the commodity. The levels of income also affect the quantity supplied and demanded. The higher the income levels the higher the quantity demanded (Lipsey & Harbury, 2014). Consumers’ purchasing power is usually raised in the event that their income levels increase hence they would demand more goods to be sold to them than before. This factor is also based upon the fact that the other factors remains constant which would mean that only income affects the demand in its sole capacity (Gillespie & Gillespie, 2011). Additionally, higher income makes the suppliers to avail more goods into the market for sale and hence the higher the income levels the higher the quantity supplied. The type of good also matters a lot which will depict its demand and supply variations. Inferior good for example will have high demand at the point when it prices increases while the normal good would have its demand low at the point where the prices rises (Welch & Welch, 2016).

##### Question 5 factors of shift in demand and supply curve

Increase in the efficiency in the factors of production causes the supply curve to shift to the left which means that more quantities would be supplied at lower prices. This notion happens because the efficiency has the effect of creating more goods at relatively lower costs which would mean that the prices would also be lowered as well making the company to get more clients which it can supply the goods (Lipsey & Harbury, 2014). The higher the income levels the higher the quantity demanded which makes the demand curve t shift to the right. Consumers’ purchasing power is usually raised in the event that their income levels increase hence they would demand more goods to be sold to them than before. This factor is also based upon the fact that the other factors remains constant which would mean that only income affects the demand in its sole capacity. Additionally, higher income makes the suppliers to avail more goods into the market for sale and hence the higher the income levels the higher the quantity supplied (Deepashree, 2013).

The type of good also matters a lot which will depict its demand and supply variations. Inferior good for example will have high demand at the point when it prices increases while the normal good would have its demand low at the point where the prices rises. Population decrease in the population has the effect of shifting the demand curve to the right making the quantity demanded be lower since the consumers have reduced a great deal. On the account of supply curve the supply curve is expected to shift to the left since the amount being supplied will be high at the higher prices caused by the less quantity supplied (Gillespie & Gillespie, 2011).

##### References

Deepashree,  (2013). General economics: For CA Common Proficiency Test (CPT). New Delhi: McGraw Hill Education.

Gillespie, A. & Gillespie, A. (2011). AS & A level economics through diagrams. Oxford: Oxford University Press.

Kilgore, M. A. (2002). Economics of natural resources management. New York: McGraw-Hill.

Lipsey, R. G. & Harbury, C. D. (2014). First principles of economics. Oxford: Oxford University Press.

Welch, P. J. & Welch, G. F. (2016). Economics: Theory & practice. New York: Wiley

#### Sharing is: CARING

Are you looking for homework writing help? Click on Order Now button below to Submit your assignment details.

##### Homework Writing Help
Sample Essay Paper on Demand Estimation

Are you looking for homework writing help on(Sample Essay Paper on Demand Estimation)?Well, you can either use the sample paper provided to write your paper or you could contact us today for an original paper. If you are looking for an assignment to submit, then click on ORDER NOW button or contact us today. Our Professional Writers will be glad to write your paper from scratch.

We ensure that assignment instructions are followed, the paper is written from scratch. If you are not satisfied by our service, you can either request for refund or unlimited revisions for your order at absolutely no extra pay. Once the writer has completed your paper, the editors check your paper for any grammar/formatting/plagiarism mistakes, then the final paper is sent to your email.

#### Writing Features

Sample Essay Paper on Demand Estimation

#### Privacy| Confidentiality

Sample Essay Paper on Demand Estimation

We do not share your personal information with any company or person. We have also ensured that the ordering process is secure; you can check the security feature in the browser. For confidentiality purposes, all papers are sent to your personal email. If you have any questions, contact us any time via email, live chat or our phone number.

### Our Clients Testimonials

• I appreciate help on the assignment. It was hard for me but am good to go now

Impact of pollution on Environment
• Am happy now having completed the very difficult assignment

Creative Message Strategies
• Your writer did a fine job on the revisions. The paper is now ok

Ethics: Theory and Practice
• The paper was so involving but am happy it is done. Will reach you with more assignments

Title: Privatization in or of America
• I expected perfection in terms of grammar and I am happy. Lecturer is always on our head but was pleased with my paper. Once again, thanks a lot

Title: Bundaberg Inquiry
• The paper looks perfect now, thank to the writer

Health Care Systems
• You helped me complete several other tasks as you handled paper. wonna thank you

Critique Paper on Political Change
###### A Short List of our Services
Sample Essay Paper on Demand Estimation

### Related Articles

Sample Essay Paper on Demand Estimation

### Analyze the Nursing Roles in providing Comprehensive care in a Variety of Community Health Settings

Community Settings This week’s graded topics relate to the following Course Outcomes (COs). CO3: Plan prevention and population-focused interventions for vulnerable populations using professional clinical judgment and evidence-based practice. (POs...

### Case Study Assignment on Ethical Issues in Asia-Pacific business

Case study assignment on Ethical Issues in Asia-Pacific business For this assignment, students will write a case study report in 2,000 words based on a case identified with circumstance or...

### Sample Report Paper on The proposed reward system and strategy for the big city university

A good reward system should motivate workers. It should also attract and retain the same workers. On the contrary, a bad reward system does not do either of these things....

### Management of PCOS through Homoeopathy-A case report

Introduction PCOS is the acronym for Polycystic Ovarian Syndrome. It is the most common endocrine disorder of women in their reproductive period manifested by irregular menstrual cycles and polycystic ovaries,...

#### Get more from us…

Would you like this sample paper to be sent to your email or would you like to receive weekly articles on how to write your assignments? You can simply send us your request on how to write your paper and we will email you a free guide within 24-36 hours. Kindly subscribe below!