Business-to-consumer

can be expressed as € PS = 0.2 + 0.0003Q. a) What is the price and quantity at which the market clears? The price and quantity at which the market clears is $3.50 and 11,000 respectively. b) What is the value of the consumer surplus and the producer surplus in this market? The consumer and producer surplus are $6,050 and $18,150 respectively. The overall benefit to society from producing and consuming candy bars is $24,200. c) Imagine that a new factory opened up which could make the item much…

In the book, The Most Good You Can Do: How Effective Altruism Is Changing Ideas About Living Ethically, by Peter Singer, the author introduces readers to a new movement called “Effective Altruism”. As stated in his book, effective altruism is “a philosophy and social movement which applies evidence and reason to working out the most effective ways to improve the world.” (Singer, 4-5) To be able to practice effective altruism, the book offers several ideas to become an effective altruist such as…

the life-cycle hypothesis, expectations about future income leads to the misuse of credit (Kish, 2006). Soman and Cheema (2002) noted that if naïve consumers have access to large amounts of credit, they are likely to infer that their lifetime income will be high, which increases their willingness to spend beyond their means. Under this scenario, consumers utilize more credit in anticipation of their income increasing, which may or may not materialize. Optimism, overconfidence in financial…

analysis: • cross-tabulations for grouped or ungrouped data • mean • median • mode • Z, T and chi square tests. Write up the results of your quantitative analysis and what the result mean in terms of market trends and developments and impact on the business. • Target customers’ income level: Below $2,000 $2,000-$3,000 $3,000-$4,000 $4,000-$5,000 $5,000-$6,000 $6,000 above Quantitative analysis techniques Results Result…

Answer a: Coefficient of the Price of pizza: This coefficient identifies effect of Price of Pizza. This term provides information that how the average demand for pizza can change with the change in the price of Pizza changes. The Coefficient is -100P where P is the price of Pizza. If there is increase in one unit price of Pizza then the demand for pizza decrease by 100 units. Because -100 X 1 will result in decrease by 100 and if P is 2 then decrease will be -100 X 2 = -200. Coefficient of the…

Moving from Microeconomic to Macroeconomic Microeconomic analysis: Microeconomic is based on the supply and demand principles. As the change in price of a good or services, it will change in quantity supplied (movement along a supply curve) (text book ). When change in income, preferences or prices of other goods or services, it will change supply (shift of a curve). (text book ) The following example illustrates the simple idea on the affect of behavior for the individual firms/household in…

Concept of Elasticity in Microeconomics The concept of elasticity is intended to measure the degree of responsiveness of a buyer or seller to a change in a key determinant, in particular price. 1 In other words, elasticity means how sensitive are consumers for a price change. I would like to talk about elasticity from the perspective of the total revenue. As we already know from the law of demand, when the price goes up, the quantity goes down. However, thanks for this equation, we can measure…

Theory of consumer choice Consumer choice denotes the decision an individual will have to make on the products or services they wish to purchase. Theory of consumer choice thus analyses how individuals decide to spend their money keeping in mind their preferences as well as budget constraints. It assumes that people will want to maximize their utility through an optimal combination of goods that they can afford. This theory has three underlying assumptions: The first being utility maximization,…

every way. The law of supply and demand explains how prices are fixed for the sale of goods. In its application to the real market, supply and demand pull against each other until the market finds an equilibrium price. Demand is the degree at which consumers want to buy a product. As the Economic theory states, the demand consists of two factors: taste and capacity to buy. Taste, which is the want for a good, decides the eagerness to buy the good at a specific price. Capacity to buy means that…

Gregory Mankiw affirms that there are two main decision makers in the society that include consumers and firms. Moreover, the definition of economic terms may vary depending on the context they are used in. For instance, supply in the consumer market refers to the amount of products that producers are able to provide in the consumer market. On the other hand, demand refers to the amount of goods that consumers are willing and are able to purchase in the market. Elasticity refers to the…