The basic formula for the price elasticity of demand is:Single choice

A

absolute decline in price/absolute increase in quantity demanded.

B

percentage change in price/percentage change in quantity demanded.

C

percentage change in quantity demanded/percentage change in price.

D

absolute decline in quantity demanded/absolute increase in price.

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Question at position 4 The following table contains own- and cross-price elasticities for five brands of yogurts. It will be used for questions 4-9, but has been repeated at the top of each question for your convenience. [table] | Yoplait | Dannon | Fage | Chobani | Noosa Yoplait | -2.5 | 2.3 | 0.8 | 1.2 | 0.5 Dannon | 2.4 | -2.3 | 0.6 | 0.9 | 0.2 Fage | 1.2 | 0.9 | -1.8 | 1.9 | 1.1 Chobani | 1.5 | 1.7 | 0.7 | -1.9 | 1.3 Noosa | 1.4 | 1.8 | 1.5 | 1.6 | -1.3 [/table] Own-price elasticities are shown on the diagonal. Cross-price elasticities are shown off-diagonal. For example, 2.4 measures the impact of Yoplait price on Dannon quantity and 2.3 measures the impact of Dannon price on Yoplait quantity. Question 1: Rank the brands based on how sensitive demand is to changes in their own price. Top label: Most elasticMost elasticposition 11[input]Position 1. Reorder Choice: YoplaitYoplaitposition 22[input]Position 2. Reorder Choice: DannonDannonposition 33[input]Position 3. Reorder Choice: ChobaniChobaniposition 44[input]Position 4. Reorder Choice: FageFageposition 55[input]Position 5. Reorder Choice: NoosaNoosaBottom label: Least elasticLeast elastic

Question at position 8 [table] | Yoplait | Dannon | Fage | Chobani | Noosa Yoplait | -2.5 | 2.3 | 0.8 | 1.2 | 0.5 Dannon | 2.4 | -2.3 | 0.6 | 0.9 | 0.2 Fage | 1.2 | 0.9 | -1.8 | 1.9 | 1.1 Chobani | 1.5 | 1.7 | 0.7 | -1.9 | 1.3 Noosa | 1.4 | 1.8 | 1.5 | 1.6 | -1.3 [/table] Own-price elasticities are shown on the diagonal. Cross-price elasticities are shown off-diagonal. For example, 2.4 measures the impact of Yoplait price on Dannon quantity and 2.3 measures the impact of Dannon price on Yoplait quantity. Question 4b: Use the information provided in the previous question. Suppose Fage has zero marginal costs. What is the break-even elasticity for this price change? Round your answer to two decimal places. Answer[table] | Yoplait | Dannon | Fage | Chobani | Noosa Yoplait | -2.5 | 2.3 | 0.8 | 1.2 | 0.5 Dannon | 2.4 | -2.3 | 0.6 | 0.9 | 0.2 Fage | 1.2 | 0.9 | -1.8 | 1.9 | 1.1 Chobani | 1.5 | 1.7 | 0.7 | -1.9 | 1.3 Noosa | 1.4 | 1.8 | 1.5 | 1.6 | -1.3 [/table] Own-price elasticities are shown on the diagonal. Cross-price elasticities are shown off-diagonal. For example, 2.4 measures the impact of Yoplait price on Dannon quantity and 2.3 measures the impact of Dannon price on Yoplait quantity. Question 4b: Use the information provided in the previous question. Suppose Fage has zero marginal costs. What is the break-even elasticity for this price change? Round your answer to two decimal places. [input]

Question at position 6 [table] | Yoplait | Dannon | Fage | Chobani | Noosa Yoplait | -2.5 | 2.3 | 0.8 | 1.2 | 0.5 Dannon | 2.4 | -2.3 | 0.6 | 0.9 | 0.2 Fage | 1.2 | 0.9 | -1.8 | 1.9 | 1.1 Chobani | 1.5 | 1.7 | 0.7 | -1.9 | 1.3 Noosa | 1.4 | 1.8 | 1.5 | 1.6 | -1.3 [/table] Own-price elasticities are shown on the diagonal. Cross-price elasticities are shown off-diagonal. For example, 2.4 measures the impact of Yoplait price on Dannon quantity and 2.3 measures the impact of Dannon price on Yoplait quantity. Question 3: Each of the following statements describes the nature of a price war between two competitors. Based on the elasticity table, select all of the true statements. Assume that all of the brands have the same cost structures and the same initial revenue. Yoplait is in a better position than Fage.Dannon is in a better position than Noosa.Dannon is in a better position than Yoplait. Fage is in a better position than Chobani.

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