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    The Demand of Sweet Potatoes in The US: Case Analysis

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    Alhabu Gaming
    1) The demand for sweet potatoes in the US increases when incomes rise or when substitute goods like white potatoes increase in price. The demand decreases when the price of sweet potatoes rises or has declined each year from 1949 to 1972. 2) The quantity demanded of sweet potatoes is directly related to income and substitute goods prices, but inversely related to the price of sweet potatoes. It had declined annually from 1949 to 1972 despite relationships with substitutes and income. 3) This document analyzes factors that influence the demand for sweet potatoes in the US market. It finds demand is positively correlated with income and substitute prices, but negatively correlated with sweet potato price. Demand declined annually from 1949-1972 despite relationships with other

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    The Demand of Sweet Potatoes in The US: Case Analysis

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    Alhabu Gaming
    191 views9 pages
    1) The demand for sweet potatoes in the US increases when incomes rise or when substitute goods like white potatoes increase in price. The demand decreases when the price of sweet potatoes rises or has declined each year from 1949 to 1972. 2) The quantity demanded of sweet potatoes is directly related to income and substitute goods prices, but inversely related to the price of sweet potatoes. It had declined annually from 1949 to 1972 despite relationships with substitutes and income. 3) This document analyzes factors that influence the demand for sweet potatoes in the US market. It finds demand is positively correlated with income and substitute prices, but negatively correlated with sweet potato price. Demand declined annually from 1949-1972 despite relationships with other

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    Business Economics Assignment 2

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    1) The demand for sweet potatoes in the US increases when incomes rise or when substitute goods like white potatoes increase in price. The demand decreases when the price of sweet potatoes rises or has declined each year from 1949 to 1972. 2) The quantity demanded of sweet potatoes is directly related to income and substitute goods prices, but inversely related to the price of sweet potatoes. It had declined annually from 1949 to 1972 despite relationships with substitutes and income. 3) This document analyzes factors that influence the demand for sweet potatoes in the US market. It finds demand is positively correlated with income and substitute prices, but negatively correlated with sweet potato price. Demand declined annually from 1949-1972 despite relationships with other

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    191 views9 pages

    The Demand of Sweet Potatoes in The US: Case Analysis

    Uploaded by

    Alhabu Gaming
    1) The demand for sweet potatoes in the US increases when incomes rise or when substitute goods like white potatoes increase in price. The demand decreases when the price of sweet potatoes rises or has declined each year from 1949 to 1972. 2) The quantity demanded of sweet potatoes is directly related to income and substitute goods prices, but inversely related to the price of sweet potatoes. It had declined annually from 1949 to 1972 despite relationships with substitutes and income. 3) This document analyzes factors that influence the demand for sweet potatoes in the US market. It finds demand is positively correlated with income and substitute prices, but negatively correlated with sweet potato price. Demand declined annually from 1949-1972 despite relationships with other

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 9

    Case Analysis:

    The Demand of Sweet


    Potatoes in the US
    Business Economics

    Astri Arsita 29120337 - Khemal Fidyawan 29120567 - Damarcha


    SYNDICATE 4
    Novalian 29120380 - Christina Tiurma 29119228
    SWEET POTATO IN THE US

    The quantity demanded of sweet potatoes in the US increase when:


    ● White potatoes, as its substitute goods, increase.
    ● Customer income increase.

    The quantity demanded of sweet potatoes in the US decrease when:


    ● The price of sweet potatoes increase.
    ● Declining every year.

    This shows that there was a reduction of taste for sweet potatoes in
    the US in 1949 to 1972. That contributed to its quantity demanded
    declined every year even though the relation with its substitute goods
    and income is directly related.
    CHEVROLET

    1. Qc = f(Pc, N, I, Pf, Pg, A, Pi)


    NO SYMBOL VARIABLE RELATION SLOPE

    1 Pc Price of Chevrolet Inversely: when the price increase, the quantity demanded decrease. -

    2 N Population Directly: when the population increase, the quantity demanded increase. +

    3 I Disposable income Directly: when disposable income increase, the quantity demanded of +
    normal goods (Chevrolet) increase.

    4 Pf Price of Ford Directly: when the price of substitute goods (Ford) increase, the quantity +
    demanded for Chevrolet increase.

    5 Pg Price of gasoline Inversely: when the price of complementary goods (gasoline) increase, the -
    quantity demanded for Chevrolet decrease.

    6 A Amount of Chevrolet advertising Directly: when the advertising increase, the quantity demanded increase. +

    7 Pi Credit incentive for Chevrolet Directly: when the incentives increase, the quantity demanded increase. +
    CHEVROLET

    2. The estimated regression equation for Chevrolets C. The equation for the demand curve for Chevrolets:
    automobile: If other things remaining constant, the demand of Chevrolet will be:
    QC = 100,000 - 100PC+ 2,000N + 50I + 30PF - 1000PG + 3A + D = (100,000 + 2,000N + 50I + 30PF - 1000PG + 3A + 40,000PI) –
    40,000(PI) 100PC
    *Assume that the part inside the () is constant and all values same as
    A. The change in the number of Chevrolets purchased per part b).
    year (QC) for each unit change in the independent or Therefore, the equation for the demand curve for Chevrolets is:
    explanatory variables: D = 1,800,000 – 100PC
    PC = 100
    N = 2,000 Plot the equation for the demand curve for Chevrolets:
    I = 50 D = 1,800,000 – 100PC
    PF = 30
    PG = 1,000
    A=3
    PI = 40,000

    B. The value of QC:


    QC = 100,000 - 100PC+ 2,000N + 50I + 30PF - 1000PG + 3A +
    40,000(PI)
    QC = 100,000 - 100(9,000) + 2,000(200) + 50(10,000) + 30(8,000)
    – 1,000(80) + 3(200,000) + 40,000(1)
    QC = 100,000 – 900,000 + 400,000 + 500,000 + 240,000 - 80,000
    + 600,000 + 40,000
    QC = 900,000
    CHEVROLET

    3. If the average value of the independent variables are B. Plot the new demand curve (D’) at the same graph:
    D’ = 2,100,000 – 100PC
    change then:

    A. The equation of the new demand curve for Chevrolets is:


    D = (100,000 + 2,000N + 50I + 30PF - 1000PG + 3A + 40,000PI) –
    100PC
    D = (100,000 + 2,000*225 + 50*12,000 + 30*10,000 – 1000*100 +
    3*250,000 + 40,000*0) – 100PC
    D = 2,100,000 – 100PC

    C. The relationship between D & D’:


    The demand of Chevrolets curve shifts due to price changes. This
    shows that the quantity demanded will be influenced by price.
    MINI MILLS STEEL

    1. The management of the Mini Mill Steel company estimated the following elasticities for a special type of steel: Ep = 2, EI =1, and Exy = 1.5,
    Where X refers to steel and Y to alumunium. Next Year, the firm would like to increase the price of the steel it sells by 6%. The management
    forecast that income will rise by 4% next year and that the price of aluminum will fall by 2%.

    A. If the sales this year are 1.200 tons of the steel, how many tons can the firm expect to sell next year?
    ● Ep= -2
    ● Ei =1
    ● Exy = 1.5
    ● Steel Price Change: 6%
    ● Forecast Income: 4%
    ● Aluminium Price: -2%

    Ep = ΔQ/ΔPx Ei = ΔQ2/ΔI Exy = ΔQ/ΔPy ΣΔQ = ΔQ1 + ΔQ2 + ΔQ3


    -2 = ΔQ/6% 1 = -12%/ΔI 1.5 = ΔQ/-2% = -12% + 4% + (-3%)
    ΔQ = -2 x 6% ΔQ2=4% ΔQ3 = -3% = -11%
    ΔQ1 = -12%

    Next year sale = 1200 x (100% -11%)


    = 1068 tons
    MINI MILLS STEEL

    1. The management of the Mini Mill Steel company estimated the following elasticities for a special type of steel: Ep = 2, EI =1, and Exy = 1.5,
    Where X refers to steel and Y to alumunium. Next Year, the firm would like to increase the price of the steel it sells by 6%. The management
    forecast that income will rise by 4% next year and that the price of aluminum will fall by 2%.

    B. By what percentage must the firm change the price of steel to keep its sales at 1200 tons next year ?
    ● Ep= -2
    ● Ei =1
    ● Exy = 1.5
    ● Steel Price Change: none
    ● Forecast Income: 4%
    ● Aluminium Price: -2%

    ΣΔQ = ΔQ1 + ΔQ2 + ΔQ3 Ep = ΔQ1/ΔPx


    0 = ΔQ1 + 4% + (-3%) -2 = -1%/ΔPx
    0 = ΔQ1 + 1% ΔPx= -1%/-2
    ΔQ1 = -1% ΔPx= 0.5%

    Assuming there is no change in steel price change, next year price should increase by 0.5%
    MINI MILLS STEEL

    NO QUESTION ANSWER

    2A Find the marginal revenue of a firm that sells a product at the price of $10 and the price MR = P (1 + (1 / EP)
    elasticity of the demand for the product it sells is (-)2.
    MR = $ 10 (1 - (½) = $5

    2B Find the price elasticity of demand of another firm that sells a product at P=$16 and MR = P (1 + (1 / EP)
    MR=$12.
    $12 = $16 (1 - (1 / EP)
    $12 = $16 - $16EP
    EP = 4

    2C What would be the marginal cost of the firm in part (B)? MR = MC


    MR = $12 = MC.
    Thank you,
    Let’s discuss!

    Astri Arsita 29120337 - Khemal Fidyawan 29120567 - Damarcha


    SYNDICATE 4
    Novalian 29120380 - Christina Tiurma 29119228

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