Will revemue for clemsons athletic department increase or de

Will revemue for clemson\'s athletic department increase or decrease? When the price of gasoline increases, customers still buy -bout the same amount of gasoline to. a tew weeKs It the pace stays elevated, the quantity purchased begins to decrease Using concepts of pr.ee elasticity of demand explain this observat-on Explain using cost concepts why airline manufacturers tend to be much larger than shirt manutacturers The concept of \"price gouging\" has long been a favorite complaint of people who do not understand market forces and would like lower prices for some products (wouldn\'t we all agree?) In fact. South Carolina has a law that prohibits \"pnee gouging\" during times of public emergencies such as the aftermath of a hurricane Are these laws effective in getting more products to consumers in times of high demand as they make it illegal for a seller to increase prices above what they had been previous to the event that resulted in increase demand? Evaluate the impact of such laws

Solution

Note: The page starts with 2 questions but no information is provided.

QUESTION - 7

Price elasticity of demand is the percent change in quantity demanded to a percent change in price of the good. In the short run, demand is relatively elastic because, if price increases, consumers cannot quickly switch to a substitute good. But with passage of time, in the long run, demand becomes more elastic because consumers get more time to find out and switch to alternative substitute goods (or change their pattern of usage). So, in long run, quantity demanded falls as price remains higher.

QUESTION - 8

Airline manufacturers have extremely high fixed costs of operations. This acts as a barrier to entry in their market because the new entrant needs to incur huge fixed cost, which may not be economically viable for a new entrant. That is why, number of firms is very low in the market and the existing firms each occupy big market shares.

QUESTION - 9

Such laws may not be much effective. If prices are kept articially low by regulation, roducers will feel discouraged to sell higher output at lower prices, and will reduce output. The regulatory authorities can at most set a price to be followed by producers; they cannot ask producers to sell a minimum level of output. Therefore, market supply of the good will decrease and a shortage will be created in the market, so the demanded goods will not reach all the consumers who demand it.