#AsuultSambar :

Problem 1. Assume that after a new portion of sanctions in the city of Novosibirsk PC printers (PCP) of only two types are sold: I and II. The demand function for PCP I is given as:

Q=-4∙P+6∙PII+0.2∙A

with P – PCP I price, PII - PCP II price, and A is standing for advertising efforts.
A) What is the demand curve given PII =10000 rubles, and A=400000 rubles?
B) What is the amount of PCP I sold if its price equals to 15000 rubles? Calculate both the total and average revenue of the firm supplying this type of PCP.
C) Let this firm reduce the price to the level of the rival product in order to increase its market share. How do output sold, total and marginal revenue change?
D) Calculate point demand price elasticities for both the points and arc elasticity for the segment. Calculate demand cross-price elasticities for both the points and arc cross-price elasticity for the segment.

Problem 2. Last year a 4 percent in overall economic activity (GNP) caused a 20 percent increase in equipment sales at Jane Manufacturing. Executive vice-president believes that during the coming year the anticipated 6 percent downturn in GDP will require a 15 percent increase in advertizing in order to maintain current sales.
A) Calculate the point income elasticity of demand for the given company,
B) Calculate the point advertizing elasticity assumption underlying vice-president’s projection.

Problem 3. Walt’s Poster Shops, Inc. has completed a regression analysis of weekly demand for its posters in three SF-area outlets during the past fiscal quarter (36 observations). What study revealed (standard errors in parentheses):

Qy=2,000 – 2,000∙Py+500∙POP+1,000∙Px
(800) (500) (200) (300)

where Qy = annual poster demand, Py = poster price in dollars, POP = high school and college population within a four miles radius (in thousands), Px = a price of competitor in dollars. During this period a typical outlet had charged a price of $5 and faced a student population of 10,000 and an average competitor price of $4.
A) What is the demand curve faced by the average Walt’s outlet?
B) What is the current point price elastiticity for Walt’s posters?
C) What is the cross-price elasticity of demand faced by a typical Walt’s outlet?