YED of Mac products

source

"Another survey seems to confirm Apple products are immune from the general economic malaise hurting consumer spending. Consumers planned to buy more Mac laptops and desktops for the back-to-school period as well as over the next 90 days, according to a a survey by ChangeWave released Monday. This compares to the No. 1 PC maker, which consumers said they would buy fewer."

LINK

Seems like even though consumption of electronic goods in general have decreased during this economic downturn, the fall in consumption for Macs is less than the fall in consumption of PCs. This probably means that the YED for Macs is relatively more inelastic compared to that of PCs.

Of course, this article was taken from a website called "Cult of Mac", so take the information and analysis with a pinch of salt =)

Popcorn and movie tickets

Link to article

Ever wondered why popcorn prices are high at cinemas like Golden Village and Cathay? This article gives an idea of why cinemas choose to offer lower ticket prices and instead charge more for popcorn.

Some things to think about...

1. Are the PED for diehard movie buffs more inelastic than those of the average moviegoer in the market for movie tickets? How about students?

2. What is the relationship between popcorn and movie tickets? Is the XED value likely to be positive or negative? According to the article, would the value of XED be different depending on who is buying the goods i.e. movie buffs versus average cinema goer?

Some videos on PED

Part 1 - http://www.youtube.com/watch?v=MNiEHvw6TTg
Part 2 - http://www.youtube.com/watch?v=DB6rmbAegvE&NR=1

lots more if you search on youtube =)

football tickets, total revenue and elasticity

This is an article from Economics Today discussing the PED of the market for football tickets in the UK and how this affects the pricing strategies for the football clubs so that they can increase their total revenues. It also briefly mentions a bit about the PES of the market too. Click on the image for to read each page.

Pirates and Tuna

Somali piracy 'reduces tuna haul' (link to BBC article)

Piracy off Somalia's coast is a cause of falls in tuna catches in the
Indian Ocean - one of the world's richest sources of the fish, experts say.

The head of the Indian Ocean Tuna Commission, Alejandro Anganuzzi, said
catches fell by about 30% last year, seriously affecting the industry. ...

...The pirates' biggest impact, however, is reduced supply, driving prices up,"
the head of the Seychelles Fisheries Authority, Rondolph Payet, told
Reuters.

How much would this affect prices and revenue of tuna sellers?


Firstly, this is a case of a change in a non-price factor of supply. The activity of the pirates have reduced supply of fishermen thus affecting the market for tuna. This is seen as a leftward shift in the supply curve. The result is that there is a shortage and this leads to upward pressure on the price of tuna. Equilibrium price of tuna thus increases and equilibrium quantity falls.


The first question is "by how much does price increase?" This is determined by the magnitude of the shift in the supply and secondly the elasticity of the demand curve.

The larger the magnitude of the shift in supply, the larger will be the increase in equilibrium price. Conversely, if the supply curve shifts by a bit, the price will only increase by a bit too. In this case, it is more likely that the supply curve has shifted by a large magnitude as "catches have fallen by 30%".

A more price inelastic demand curve will lead to a greater increase in the price of tuna while a more price elastic demand curve will lead to a relatively smaller increase in the price.

The second question is "how does this affect total revenue of the tuna sellers?". This again depends on the elasticity of the demand for the tuna market. If the PED is elastic, a rise in price will lead to a fall in total revenue. This is because the gain in revenue due to an increase in price is less than the loss in revenue due to a more than proportionate fall in quantity. If the PED is inelastic, the total revenue actually increases with an increase in prices.

So is the PED for the tuna market elastic or inelastic?

Inelastic Chocolate?

From Straits Times 12th Feb 2009

The gist of the article is that even though chocolate prices have risen by up to 40% in prices, Singaporeans are still buying premium chocolates but in smaller quantities. The increased in prices are due mainly to the increasing costs of cocoa. Firstly, cocoa plants are highly sensitive to weather conditions and recently weather conditions have affected the supply of cocoa plants. Secondly, producers of cocoa are changing to other easier to grow crops.

Demand for Chocolates in the Singapore market could be said to be price inelastic to an extent. Even though prices have increased by 40%, quantity demanded has not fallen as much. As seen from the diagram above, the increase in price from P1 to P2 has led to a less than proportionate fall in quantity. Sales for Sheng shiong have "not dipped at all" while in other shops, customers are still buying, but in lesser quantities.