Suppose that the current market price of VCRs is $300, that the average consumer disposable income is $30,000, and that the price of DVDs (a substitute for VCRs) is $500. Under these conditions, annual US demand for VCRs is 5 million per year. Statistical studies have shown that for VCRs the own-price elasticity of demand is -1.3. The income elasticity of demand for VCRs is 1.7. The cross-price elasticity of demand for VCRs with respect to DVDs is 0.8.
Use the following information to predict the annual number of VCRs sold under the following conditions:
1) Increasing competition from Asia causes VCR prices to fall by 10% with income and the price of DVDs is unchanged.
2) Income tax reductions raise average disposable personal income to $31,500 with prices unchanged.
3) An inventor in Menlo Park invents a cheaper way to produce VCRs and income unchanged.
4) All of the events described in parts 1-3 occur simultaneously.

Aprice ceiling is “binding” if the price ceiling is set below the equilibrium price. suppose that the equilibrium price is $5. if a price ceiling is set at $6, this will not affect the market in any way since $5 remains a legally allowable price (since $5 < $6). a price ceiling of $6 is called a “non-binding” price ceiling. on the other hand, if the price ceiling is set at $4, the price ceiling is “binding” because the natural equilibrium price is $5 but that is no longer allowed. what happens when there is a binding price ceiling? at a price below the equilibrium price, quantity demanded exceeds quantity supplied. there is a shortage. normally, price increases eliminate shortages by increasing quantity supplied and decreasing quantity demanded. in this case, however, price increases are not allowed past the price ceiling. we therefore predict that the observed market price will be right at the price ceiling and there will be a permanent shortage. the observed quantity bought and sold will be dictated by the quantity supplied at the price ceiling. although consumers would like to buy more, there are no more units for sale

4. the condition requires that only one of the selected criteria be true for a record to be displayed.

Aminor has the legal right to repudiate