P 275 franks heating and air conditioning company

This preview shows page 97 - 100 out of 163 pages.

(p. 275) Frank's Heating and Air Conditioning Company specializes in electric heat pumps. Frank keeps track of the price of natural gas, knowing that: A. natural gas creates m environmental greenh than coal. B. an increase in the price of natural gas will increase dem systems. C. gas heating systems and electrical heating systems are D. when the price of natural gas goes up, the quantity dem E. the demand for natural gas is price elastic. Gas and electrical heating systems are substitutes. This means that if the price of natural gas goes up, it makes electrical heating systems seem to be a better value by comparison, and demand for electric heat pumps will rise. AACSB: Analytic Blooms: Apply Difficulty: 2 Medium Learning Objective: 13-03 Explain price elasticity. Topic: 5 Cs of Pricing 89. (p. 275) If the price for a product increases, the demand for a substitute product will: If the price of a product goes up, it makes the price of a substitute seem to be a better value by comparison, and demand for the substitute will rise.
Image of page 97

Subscribe to view the full document.

AACSB: Analytic Blooms: Understand Difficulty: 2 Medium Learning Objective: 13-03 Explain price elasticity. Topic: 5 Cs of Pricing 90. (p. 275) Managers of Wendy's fast food restaurants keep track of prices at competitors such as McDonald's, Burger King, and Arby's, knowing that a decrease in the prices at these other fast food restaurants will: The other fast food restaurants are potential substitutes for Wendy's. If prices of substitutes go down, it makes the food at Wendy's seem like less of a value, and demand will go down. AACSB: Analytic Blooms: Apply Difficulty: 2 Medium Learning Objective: 13-03 Explain price elasticity. Topic: 5 Cs of Pricing 91. (p. 275) Internet comparison shopping sites like Shopping.com and Pricegrabber.com allow consumers to compare prices of substitute products much more easily than is possible without the Internet. These sites have: By making price comparisons easier, these sites have made consumers more likely to select from a group of substitutes based on price, thus increasing cross-price elasticity (the effect of a price change in one product on demand for another).
Image of page 98
AACSB: Analytic Blooms: Apply Difficulty: 3 Hard Learning Objective: 13-03 Explain price elasticity.
Image of page 99

Subscribe to view the full document.

Image of page 100

{[ snackBarMessage ]}

Get FREE access by uploading your study materials

Upload your study materials now and get free access to over 25 million documents.

Upload now for FREE access Or pay now for instant access
Christopher Reinemann
"Before using Course Hero my grade was at 78%. By the end of the semester my grade was at 90%. I could not have done it without all the class material I found."
— Christopher R., University of Rhode Island '15, Course Hero Intern

Ask a question for free

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern