Like other children, Mr. Santos’ daughters also love ice cream. Mr. Santos bought half gallon of ice cream for them every pay day (15th and 30th of the month). Last month, Mr. Santos got promoted in his job. With this, an additional salary of ₱5,000.00 was added to his ₱20,000 basic salary. Now, he can buy 2 half gallons of differently flavored ice cream every pay day.
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Answer:
Compute for the elasticity. Show your Solution.
1. Product A has an introductory price of ₱120.00. After 3 months of business operation, the owner decided to increase the price by 8 % which caused the demand to decrease from 495 to 450.
2.The price of pork increased from ₱240.00 to ₱280.00. Because of this, Mrs. Cruz, a cafeteria owner, decided to offer more chicken dishes than pork dishes. Her demand for chicken increases to 50 kilos per week from 35 kilos before the price increase of pork.
3.Like other children, Mr. Santos' daughters also love ice cream. Mr. Santos bought half gallon of ice cream for them every pay day (15th and 30th of the month). Last month, Mr. Santos got promoted in his job. With this, an additional salary of ₱5,000.00 was added to his ₱20,000 basic salary. Now, he can buy 2 half gallons of differently flavored ice cream every pay day
When Mr. Santosh got a promotion with an additional salary of 5000 he could buy two gallons of differently flavored ice cream every day.
- This is the concept of average propensity to consume.
- The part of the total income or an increase in the income that consumers tend to spend on various goods and services rather than to save is known as propensity to consume. When Mr. Santos got a promotion with an additional salary he could either save the money or buy ice cream for his kids.
- It is a very simple and psychological law which means that the increase in consumption with the increase in their income.
- People can decide how much they want to add to their consumption and to their savings