Econ191da1

Econ191da1 - October 6, 2008 Econ 191DA Problem Set#1 2....

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October 6, 2008 Econ 191DA Problem Set#1 2. The procedure explained in the Price Sensitivity Movement consists of implementing a series of four questions that will reveal to the seller the preferences that the consumers have. The questions included in the survey ask at what prices would a particular product be considered cheap, at what prices would it be considered expensive, what price would be so cheap you would question its quality, and at what price would the product be so expensive you would not consider buying it. Once the results of the survey are graphed it must be analyzed how sensitive it is to lower or raise the price and what effect it would have on the demand for that product. 3. The Price Sensitivity Method is simply a way of gauging how an increase or decrease in price will affect the demand for the particular product that is in question. This method says that consumer surplus, which is the extra benefit
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Econ191da1 - October 6, 2008 Econ 191DA Problem Set#1 2....

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