This document provides an in-depth analysis of the coffee capsule market, including market structure, demand, and supply. It also explores the concept of profit, GDP, and cross-price elasticity. The analysis is based on a series of exercises and questions that provide a comprehensive understanding of the market dynamics.
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[...] If the price of a Nespresso coffee machine increases by it therefore goes from 15,000 to 15,1501, the demand for Nespresso capsules decreases We indeed get Dn = 16,000 - 20 + 15,150 = 50 instead of 200 (cf. question Cross-price elasticity = change in demand/change in price = (50 - 200)/(15,150 - 15,000 = 150)/150 = - so we have a unit elasticity. The Nespresso coffee machine and its capsules are therefore complementary goods. 4. The price of the Senseo capsule thus goes from 30 to 31.5, so the demand for Nespresso capsules will increase. It is a case of substitutable goods. [...]
[...] The cross-price elasticity of Senséo is stronger than that of Dolce Gusto, so the Senseo capsule brand is the most competitive with Nespresso. 6. Total Recipe = Price x Quantity Average Recipe = Total Recipe / Quantity Marginal Recipe = Variation of Total Recipe 7. Total Cost = Fixed Cost + Variable Cost Average Cost = Total Cost / Quantity Average Variable Cost = Variable Cost / Quantity Marginal Cost = Change in Total Cost Total Recipe Average Recipe Marginal Recipe Total Cost Average Cost Variable Cost Variable Cost Marginal Cost Q Price Average 275 60 16500 60 115 1,91 15 0,05 375 55 20625 55 4125 355 6,45 255 0,68 240 475 50 23750 50 3125 895 17,9 795 1,673 540 575 45 25875 45 2125 1735 38,55 1635 2,84 840 675 40 27000 40 1125 2875 71,87 2775 4,11 1140 775 35 27125 35 125 4315 123,28 4215 5,43 1440 875 30 26250 30 -875 6055 201,83 5955 6,80 1740 975 25 24375 25 -1875 8005 320,2 7995 8,2 1950 1075 20 21500 20 -2875 10435 521,75 10335 9,61 2430 1175 15 17625 15 -3875 13075 871,66 12975 11,04 2640 8. [...]
[...] Exercise Course Questions points) 1. The final level of GDP is 109.2 which corresponds to (100 * 1.3) the first year, or 130 decreased by 20.8 (which corresponds to (130 * 1.16), or 109.2 in the end The annual average growth rate is 21,092 - so 1,045 - 1 = 0.045, therefore 4.5 % 2. - Fighting inflation, - Favoring growth, - Manage the exchange rate 3. The real GDP corresponds to the wealth created over the course of a year, deflated by inflation (i.e., it takes into account the rise in prices), whereas the nominal GDP does not take into account inflation. [...]
