Case Study : Read the following passage carefully

1. * Ensure to cite and reference ALL sources
2. -* answer all questions Part 1-3 follow:
3. * Please Make reference to any relevant economic theories that may enhance your answer of discussion questions

Juici Patties is one of the leading companies in the patty business. With over 60 restaurants across the island, Juicy Patties is the largest fast-food chain in Jamaica, almost doubling the number of outlets of rival Tastee. The company expanded from producing beef patties into a wide range of products such as chicken, lobster, vegetable, cheese, and mega cheese patties. Their menu also includes callaloo and vegetable loaves as well as pastries. They also serve many traditional Jamaican breakfast and lunch dishes. Despite its success, Juici Patties had to end its franchise agreement with several of its corporate area restaurants due to inadequate service standards. According to the marketing manager of Juici Beef, they decided to end the franchise agreement with these restaurants after they received. several complaints about the poor service at these locations and efforts to resolve the problem failed. One Juici franchisee in the Duhaney Park area complained that his inability to offer good customer service was a result of a loss of revenue when JuiciBeef increased the price of its products. He claimed that when the price of a beef patty increased from $300.00 to $380.00 the quantity demanded decreased from 10,000 units to 6,000 units per week. Required: Part 1 A. Calculate the price elasticity of demand (using the mid-point method) and interpret the results.

• B. Identify THREE (3) factors that determine whether the demand for patty is likely to be elastic or inelastic. C. Describe the impact on total revenue of the change in price. Explain what accounts for this change.
• D. Based on the price elasticity of demand (calculated in part A) what would have been the best decision (in terms of whether or not to increase the price) to increase the revenue of the Duhaney Park franchise. Give reasons for your answer.
• E. When Marcia's income increased from $25,000.00 to $40,000 per week, she bought 2 patties per week, whereas she previously bought only 4 patties per week. Calculate the income elasticity of demand. For Marcia, patties are what type of goods?
• F. When the price of patties increased from $300 to $380 the quantity demanded of cocoa breads increased from 1500 to 2000 units. Calculate the cross elasticity of demand and explain the relationship between patties and cocoa bread.

PART 2 For each of the following scenarios explain with well-reasoned arguments whether the planned objectives will be effectively met in your opinion (mention any reservations you may have):

• A. Government plans to increase taxes on restaurants that sell unhealthy foods. The purpose of this action is to combat obesity and improve health and wellness.
• B. Government plans to give a further increase in the fares charged by public transportation operators to ensure they have sufficient revenues to cover operating costs. Explain the relevance of price elasticity of demand if any to this decision.
• C. The government introduces rent control to restrict the amount by which a landlord can increase rent. This is to ensure many people can find suitable accommodation. Is this likely to result to increase the availability of suitable accommodation? Can the result be opposite to that intended by the government? Explain your answers.
• D. Government plans to increase revenues by placing a special tax on party events. The effect of this tax will be to increase the price charged by party promoters to attend their events. (Explain with reference to price elasticity of demand the likely success of this measure).
• E. The government plans to increase taxes on imported chicken. The aim is to encourage local production of chicken. Explain the likely impact on chicken prices in the short and long run as well as possible impact on local chicken production.

PART 3 A. Give an example of a product that you use personally that you would describe as price inelastic. Explain what accounts for its inelasticity

• B. Give an example of a product that you use personally that you would describe as very price elastic. Give THREE-reasons that account for the elasticity of the product
• C. Give an example of two related products that have a negative cross price elasticity and explain the reason for the negative price elasticity
• D. Give an example of two related products that have a positive cross price elasticity and explain the reason for the positive cross price elasticity