Homework answers / question archive / Task 1 Suppose that on June 2020, Didasko find the cure of COVID-19 with the effectiveness of 99

Task 1 Suppose that on June 2020, Didasko find the cure of COVID-19 with the effectiveness of 99

Economics

Share With

---

Task 1

Suppose that on June 2020, Didasko find the cure of COVID-19 with the effectiveness of 99.99%. Below indicates demand and supply schedules are as follows:

  

Price ($)

4 6 8 10 12 14

Quantity Demanded

Quantity Supplied

(unit

per week) 1050 1050 1050 1050 1050 1050

(unit

per week) 800
900

1000 1100 1200 1300

                  

Draw the demand and supply curves. What is unusual about this demand curve? Why might this be true?

What are the equilibrium price and quantity of drugs?

What would most likely happen to Didasko's product in part a when other companies find a cure for coronavirus with the equivalent level of effectiveness?

 

© Didasko 2022. All rights reserved. 3

Task 2

Based on demand schedules below:

Product A Product B

   

Price Quantity Price

($)

demanded ($) (units)

5 1150 10 570 15 370 20 260 25 170 30 110 35 70 40 40

Quantity demanded (units)

2 100

5 90 10 80 20 70 30 60 40 50 60 35 80 27

                                 

A. B.

Complete table below for both product A and B and based on those tables, which product that is more likely to be elastic and inelastic demand?

If you are marketing manager of both products and market price for both products are $20. Discuss what is the best pricing strategy to increase total revenue of the products A and B? Ensure that you compare and comment on how change in market price affects total revenue for both products.

Price

Quantity demanded

Total Revenue

change in price (?? − ??) (?? + ??) ? × ???

change in quantity (?? − ??) × ??? (?? + ??) ?

elasticity demand (?????? ?? ???????? ) ?????? ?? ?????