• Explain the difference between shortages and scarcity. In answering this question, you should consider the difference between the short run and the long run in economic analysis.
• Explain the difference between point elasticity and arc elasticity. What problem can arise in the calculation of the latter, and how is it usually dealt with? (Please use actual business examples)

2. Quantitative Analysis Write a Quantative Analysis report on the following problems: 1. Given the demand equaiion 0 21,500 200R calculate all the numbers necessary to ll in the following table: Elasticity P 0 Point Arc Total Revenue Marginal Revenue $7. 00 $6.50 $6. 00 $5.50 $5.00 54550 $4.00 $3.00 $2.50 2. Forecasting The sales data for the Lonestar Sports Apparel Company for the last 12 years are as follow: Sales 2001 2002 2003 2004 2005 $400,000 $440,000 $480,000 $518,000 $554,000 Sales 2007 2000 2009 2010 2011 $61?,000 $654000 $700000 $756,000 $824,000 A What is the 2001 2012 compound growth rate? B. Using the resutt obtained in part a, what is your 2013 projection? C. If you were to make your own projection, what would you forecast? 2006 $587,000 2012 $906,000 Demand Estimation One of the most difcult tasks in regression analysis is to obtain the data suitable for quantitative studies of this kind. Suppose you are trying to estimate the demand tor home furniture. Suggest the kinds of variables that could be used to represent the following factors, which are believed to affect the demand for any product. Be as spectc as possible about how the vanables are going to be measured. Do you anticipate any difculty in securing such data? Explain. Sales Determinants of Demand for Fumiture Suggested Variables to Use in Regression Analysis Pce Tastes and preferences Price of related products Income Cost or availability of credit Number of buyers Future expectations Other possible factors