The discussion requires a minimum of 300 words, 3 scholarly sources, including the textbook. Make sure that you use APA style with your references. Under no circumstances use any direct quotes. Any directly quoted or copied material will result in a zero for the assignment. Let’s be sure to write it in own work 100% and give appropriately when using someone’s else work.

Reference for textbook attached:

Thomas, C. R., & Maurice, S. C. (2010). Managerial economics: Foundations of business analysis and strategy (10th ed.). New York: McGraw-Hill/Irwin.

1 U.S. cigarette makers face enormous punitive damage penalties after losing a series of class-action lawsuits that heaped penalties amounting to several hundred billion dollars on the tobacco industry. In spite of the huge penalties, The Wall Street Journal reported, “The damage (to cigarette makers) is generally under control.” What action do you suppose the cigarette companies took to avoid bankruptcy? Why did this action succeed?

1,500 word count and there is a total of 3 questions each (not including in-text citation and references as the word count), a minimum of 4 scholarly sources are required in APA format. For the 4 scholarly sources, one from the textbook that’s posted below and the other two from an outside source . Let’s be sure to write it in own work 100% and give appropriately when using someone’s else work. Under no circumstances use any direct quotes. Any directly quoted or copied material will result in a zero for the assignment.

Reference for textbook attached:

Thomas, C. R., & Maurice, S. C. (2010). Managerial economics: Foundations of business analysis and strategy (10th ed.). New York: McGraw-Hill/Irwin.

1. What effect, if any, does each of the following events have on the price elasticity of demand for corporate-owned jets?

a) A decline in corporate earnings causes firms to cut their travel budgets, which in turn causes expenditures on corporate jet travel to become a larger fraction of total spending on corporate travel.

b) A new, much more fuel-efficient corporate jet is introduced.

c) Further deregulation of the commercial airlines industry substantially increases the variety of departure times and destinations offered by commercial airlines.

d) The cost of manufacturing corporate jets rises.

2. Assume that the demand for cosmetic or plastic surgery is price inelastic. Are the following statements true or false? Explain.

a) When the price of plastic surgery increases, the number of operations decreases.

b) The percentage change in the price of plastic surgery is less than the percentage change in quantity demanded.

c) The marginal revenue of another operation is negative.

d) Changes in the price of plastic surgery do not affect the number of operations.

e) Quantity demanded is not very responsive to changes in price.

f) If more plastic surgery is performed, expenditures on plastic surgery will decrease.

3. Fill in the blanks:

a. The price elasticity of demand for a firm’s product is equal to –1.75 over the range of prices being considered by the firm’s manager. If the manager increases the price of the product by 9 percent, the manager predicts the quantity demanded will ________ (increase, decrease) by ________ percent.

b. The price elasticity of demand for an industry’s demand curve is equal to –1.75 for the range of prices over which supply decreases. If total industry output is expected to decrease by 14 percent as a result of the supply decrease, managers in this industry should expect the market price of the good to ________ (increase, decrease) by ________percent.

4. Use the linear demand curve shown below to answer the following questions.

a. The point elasticity of demand at a price of $500 is _________.

b. The point elasticity of demand at a price of $175 is _________.

c. Demand is unitary elastic at a price of $_________.

d. As price falls, |E| __________________ (gets larger, gets smaller, stays the same) for a linear demand curve.