This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Edgar only consumes protein shakes with his income, I. The price of shakes is p. a. What is ... (Read 180 times)

PhilipSeeMore

  • Hero Member
  • *****
  • Posts: 561
on: Jul 1, 2018
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
Reply #1 on: Jul 1, 2018
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
Great answer, keep it coming :)

mjenn52

  • Member
  • Posts: 351
Reply 3 on: Yesterday
:D TYSM

« previous next »
 

Did you know?

Congestive heart failure is a serious disorder that carries a reduced life expectancy. Heart failure is usually a chronic illness, and it may worsen with infection or other physical stressors.

Did you know?

Giardia is one of the most common intestinal parasites worldwide, and infects up to 20% of the world population, mostly in poorer countries with inadequate sanitation. Infections are most common in children, though chronic Giardia is more common in adults.

Did you know?

Your chance of developing a kidney stone is 1 in 10. In recent years, approximately 3.7 million people in the United States were diagnosed with a kidney disease.

Did you know?

The Centers for Disease Control and Prevention has released reports detailing the deaths of infants (younger than 1 year of age) who died after being given cold and cough medications. This underscores the importance of educating parents that children younger than 2 years of age should never be given over-the-counter cold and cough medications without consulting their physicians.

Did you know?

Although puberty usually occurs in the early teenage years, the world's youngest parents were two Chinese children who had their first baby when they were 8 and 9 years of age.

Protein Titan Protein Titan
Race-Ethnicity and Income Extremes Race-Ethnicity and Income Extremes
Symporter protein in the loop of Henle: (a) normal reabsorption of inhibition of the Na+, K+, and ... Symporter protein in the loop of Henle: (a) normal reabsorption of inhibition of the Na+, K+, and ...
GTP binding site on a Ga protein, Gia1 GTP binding site on a Ga protein, Gia1
Your Body Digests, Absorbs, and Synthesizes Protein Your Body Digests, Absorbs, and Synthesizes Protein
Saving Rates by Income Quintile, 2003 Saving Rates by Income Quintile, 2003
Video: The Vestibular System

For a complete list of videos, visit our video library