Business Data Management Quiz 1: 26 February 2023 (January 2023 term)

A local milk store orders 300 half-litre bottles of milk and 100 loaves of bread each week. The store sells a bottle of milk for Rs. 20 and a loaf of bread for Rs 23. At the end of the first week, the store has sold 160 bottles of milk, while the loaves were sold out by mid-week which left customers leaving unhappy. With this information, answer the given subquestions.

What economic situation is the store facing? Select all that apply.

A local milk store orders 300 half-litre bottles of milk and 100 loaves of bread each week. The store sells a bottle of milk for Rs. 20 and a loaf of bread for Rs 23. At the end of the first week, the store has sold 160 bottles of milk, while the loaves were sold out by mid-week which left customers leaving unhappy. With this information, answer the given subquestions.

Select all the statements that are TRUE

Consider this hypothetical example: A local baker increased the price of their iconic loaf of bread from INR 23 per loaf to INR 25. This resulted in consumers buying only 500 loaves of bread a week (while earlier, the sales was 800 loaves a week). In the same week, an international brand launched their flagship product in the local market, starloaf breakfast bread at a discounted price of INR 20. This promotional offer on starloaf increased its sales by a whopping 25% compared to other markets! To add to all the complexity, in the same week, the price of petrol increased by 3%, and that of diesel by 2.5%, resulting in a net decrease in fuel usage by 0.02% and a 1% increase in truck transport fares. Answer the given subquestions.

Given all this data, calculate the price elasticity of demand of the local baker’s bread loaf (round the answer to 2 decimal places and DO NOT use mid-point method). Give the absolute value of the answer.