1-) (Categories of Price Elasticity of Demand) For each of the following absolute values of price elasticity of demand, indicate whether demand is elastic, inelastic, perfectly elastic, perfectly inelastic, or unit elastic. In addition, determine what would happen to total revenue if a firm raised its price in each elasticity range identified.
a) ED = 2.5:elastic
b) ED = 0.8:inelastic
2-) (Price Elasticity of Supply) Calculate the price elasticity of supply for each of the following combinations of price and quantity supplied. In each case, determine whether supply is elastic, inelastic, perfectly elastic, perfectly inelastic, or unit elastic in each case. Please give details to ...view middle of the document...
Apollo’s overall private mission is to provide world class health care to India but also profit by substituting high end medical care to Western patients at a fraction of the cost.
Apollo also conducts patient billing for U.S. firms and does clinical trials for large pharmaceuticals. Another area of company expertise is “medical tourism.” A patient can schedule a seaside resort vacation to convalesce from their surgery as soon as they are well enough to travel. The consulting firm McKinsey and Company expects this combination of medical care and tourism in India to approach $2 billion a year by 2012. How does the concept of elasticity of demand relate to this topic? Briefly discuss.
The elasticity of demand is related to this topic because healthcare is a need when one is sick and any price can be charged however if a company lowered this cost they can take all the business.
5. During the 1980s, the U.S. Congress imposed a high sales tax on yachts, figuring that the rich could afford to pay for this luxury. But so many jobs were lost in the boat-building industry that the measure was finally repealed. What did Congress get wrong in imposing this tax? Briefly discuss.
Congress did not see that the rich would no longer would want to own yachts when they have to pay such high taxes and cost many boat builders their jobs because the demand for boats fell.
6-) Please click on the following link to read the article and answer the questions below.
"In Dusty Archives, a Theory of Affluence"
a. What might you be able to infer about the elasticity of demand from the following statement in the article? "He has documented that several aspects of what might now be called middle-class values changed significantly from the days of hunter gatherer...