Question

In: Economics

In a 6-brand simulation model used to evaluate the effects of price increases of one brand...

In a 6-brand simulation model used to evaluate the effects of price increases of one brand on the shares of rival brands of luxury automobiles, how many own-price and cross-price elasticities would be estimated?


a. 5 own-price elasticities, 16 cross-price elasticities
b. 6 own-price elasticities and 30 cross-price elasticities
c. 6 own-price elasticities and 12 cross-price elasticities
d. 6 own-price elasticities and 36 cross-price elasticities

Solutions

Expert Solution

Since there are 6 brands, there is going to be 6 own price elasticity, one for each.

The cross price elasticity is calculated for 2 goods at a time. Hence total number of cross price elasticity=6*5=30.

Hence the correct option is

b. 6 own-price elasticities and 30 cross-price elasticities

Rahul Sunny answered 3 years ago
Next > < Previous

Related Solutions

Brand Design Model, Brand Portfolio Molecule, and Brand Report Card Evaluate the value of assigning appropriate...
Brand Design Model, Brand Portfolio Molecule, and Brand Report Card Evaluate the value of assigning appropriate brand identities to represent health care goods, services, and institutions. Provide support for your rationale. Assess the value of Calder and Reagan’s Brand Design Model as a device for systematically guiding health care marketers through the process of formulating brands. Explain one (1) reason why a SWOT analysis is needed to help health care organizations understand competitor brands. Provide two (2) examples from a...
Discuss the effects of a shock that increases oil prices in the AD-AS model. Be sure...
Discuss the effects of a shock that increases oil prices in the AD-AS model. Be sure to explain also the problem of stagflation.
Discuss the effects of a shock that increases oil prices in the AD-AS model. Be sure...
Discuss the effects of a shock that increases oil prices in the AD-AS model. Be sure to also explain the problem of stagflation.
6. Stock price simulation: A stock’s price is lognormally distributed with mean μ = 15%. The...
6. Stock price simulation: A stock’s price is lognormally distributed with mean μ = 15%. The current stock price is S0 = 35. Following the template on the spreadsheet, create 60 static standard normal deviates using Data|Data Analysis|Random Number Generation. Use these random numbers to simulate the stock price path over 60 months. Create price paths for σ = 15%, 30%, and 60% and graph these three paths on the same axes.
The price elasticity of demand for cat food is -0.4 and the price increases by 6%.  ...
The price elasticity of demand for cat food is -0.4 and the price increases by 6%.           a.   How much will sales of cat food change?  Show your work.         b.   What will happen to consumer expenditures on Purina cat food?  Explain.
In the Malthusian model, suppose that the quantity of land increases. Using diagrams, determine what effects...
In the Malthusian model, suppose that the quantity of land increases. Using diagrams, determine what effects this has in the long-run steady state and explain your results. I need solve this problem nicely
If the price of crude oil, a factor used in the production of gasoline, increases and...
If the price of crude oil, a factor used in the production of gasoline, increases and the number of people who own cars falls:" the equilibrium price of gasoline will increase and equilibrium quantity of gasoline will decrease. the equilibrium price of gasoline will be uncertain and equilibrium quantity of gasoline will decrease. the equilibrium price of gasoline will be uncertain and equilibrium quantity of gasoline will increase.
Evaluate and show graphically your responses for the following statements when the Price of X increases,...
Evaluate and show graphically your responses for the following statements when the Price of X increases, then If X is Giffen, then it must be inferior, but if a good is inferior it doesn’t have to be Giffen. If X is inferior, the demand for X cannot be elastic. Provide a graphical proof for your explanation.
Choose and evaluate three TV commercials in terms of product, brand awareness/ recognition. Use AIDA model...
Choose and evaluate three TV commercials in terms of product, brand awareness/ recognition. Use AIDA model to explain the effectiveness of each commercial.
30. The following data show the brand, price ($), and the overall score for 6 stereo...
30. The following data show the brand, price ($), and the overall score for 6 stereo headphones that were tested by Consumer Reports. The overall score is based on sound quality and effectiveness of ambient noise reduction. Scores range from 0 (lowest) to 100 (highest). The estimated regression equation for these data is ŷ = 23.185 + 0.318x, where x = price ($) and y = overall score. Brand Price Score Bose 170 76 Scullcandy 160 71 Koss 95 62...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT