10 Nov Four firms have roughly equal shares of the
Four firms have roughly equal shares of the market for farm-raised catfish. The price elasticity of demand for the market as a whole is estimated at -1.5. If all firms raised their prices by 5 percent, by how much would total demand fall? What is the price elasticity if a single firm raises its price (with other firms’ prices unchanged? Hint: Use the expression for elasticity in equation 3.8b, E P = (dQ /dP)(P/Q), and note that the individual firm’s output Q 1 is only one-quarter as large as total output Q. Suppose that the quantity supplied by the four firms is forecast to increase by 9 percent. Assuming that the demand curve for catfish is not expected to change, what is your forecast for the change in market price (i.e., what percentage price drop will be needed to absorb the increased supply)?
Order an Excellent Paper with Bonpapers.com Writing Service
Bonpaper is a Custom Research Paper Writing service based in USA that is Available 24/7 to cater your needs. We have huge experience of writing essays about every possible topic. We have access to the online libraries, peer-journals, and news sites which makes it possible to gather enough data about the topic.
We provide the plagiarism-free and grammatically perfect essay writing service to our clients. We have written hundreds of essays so far and our clients have gained excellent results as well.
Need Assignment Help?