This topic contains a solution. Click here to go to the answer

Author Question: Edgar only consumes protein shakes with his income, I. The price of shakes is p. a. What is ... (Read 138 times)

PhilipSeeMore

  • Hero Member
  • *****
  • Posts: 561
Edgar only consumes protein shakes with his income, I. The price of shakes is p.
 
  a. What is Edgar's demand equation for shakes?
  b. Can protein shakes be an inferior good for Edgar? Explain.
  c. What is the price elasticity of Edgar's demand for shakes? Derive using calculus.
  d. What is the income elasticity of Edgar's demand for shakes?

Question 2

For an oligopolistic firm, which of the following can be identified as a strategy?
 
  A) Produce 10,000 units regardless of what the rivals do.
  B) Advertise if the rival advertises, do not advertise if the rival does not advertise.
  C) Raise the price if the rival raises the price, keep the current price if the rival lowers its price.
  D) All of above.



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

smrerig

  • Sr. Member
  • ****
  • Posts: 325
Answer to Question 1

a. Q = I/p
b. No, as income rises, Edgar will purchase more of the only good he consumes, making shakes a normal good. Also, recall that the weighted sum of income elasticities must sum to 1.
c. With calculus, dQ/dp = -I/p2. Ed= -1.
d. With calculus, dQ/dI = 1/p. Ei = 1. In words, if Edgar's income doubles, he will double his consumption of protein shakes.

Answer to Question 2

D




PhilipSeeMore

  • Member
  • Posts: 561
Reply 2 on: Jul 1, 2018
Gracias!


rleezy04

  • Member
  • Posts: 322
Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

 

Did you know?

Vital signs (blood pressure, temperature, pulse rate, respiration rate) should be taken before any drug administration. Patients should be informed not to use tobacco or caffeine at least 30 minutes before their appointment.

Did you know?

About 600,000 particles of skin are shed every hour by each human. If you live to age 70 years, you have shed 105 pounds of dead skin.

Did you know?

Barbituric acid, the base material of barbiturates, was first synthesized in 1863 by Adolph von Bayer. His company later went on to synthesize aspirin for the first time, and Bayer aspirin is still a popular brand today.

Did you know?

Urine turns bright yellow if larger than normal amounts of certain substances are consumed; one of these substances is asparagus.

Did you know?

Tobacco depletes the body of vitamins A, C, and E, which can result in any of the following: dry hair, dry skin, dry eyes, poor growth, night blindness, abscesses, insomnia, fatigue, reproductive system problems, sinusitis, pneumonia, frequent respiratory problems, skin disorders, weight loss, rickets, osteomalacia, nervousness, muscle spasms, leg cramps, extremity numbness, bone malformations, decayed teeth, difficulty in walking, irritability, restlessness, profuse sweating, increased uric acid (gout), joint damage, damaged red blood cells, destruction of nerves, infertility, miscarriage, and many types of cancer.

For a complete list of videos, visit our video library