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Greenaqua Corp. is the only supplier of bottled drinking water in the country Lithuania. Due to the profits the firm enjoys, new corporations are interested in entering the market. If a few more companies producing their own line of bottled drinking water enter the market, which of the following statements will be true about Greenaqua Corp.?

  The elasticity of demand for Greenaqua Corp.'s product is likely to decrease.
  The elasticity of demand for Greenaqua Corp.'s product is likely to increase.
  The profit Greenaqua Corp. earns on their line of bottled drinking water is likely to increase.
  The elasticity of demand for Greenaqua Corp.'s product is likely to remain the same.

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Related questions

1. Suppose there is an increase in the supply of a product. Rank the following own price elasticity of demand classifications according to which has BOTH the largest effect on price and the smallest effect on quantity: perfectly (infinitely) elastic, elastic, inelastic, unit elastic, or perfectly (infinitely) inelastic. Diagrams may be useful.

2. If the own price elasticity of demand for beer is approximately unity, what would be the direction of the change (increase, decrease, no change) in total revenue, total cost and profits of an increase in price.

The change in the direction of total revenue is:_________________________________

The change in the direction of total cost is:_________________________________

The change in the direction of profits is:_________________________________


3. 11. The own price elasticity of demand for cigarettes is 0.5. Suppose all of the

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The change in the direction of total revenue is:_________________________________

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Hyflux dips toes into wellness, beauty market /
Hyflux banks on oxygenated water for consumer market
In City Square Mall, a new store offering bath facilities has opened its doors to shoppers.
This marks Hyflux, the company better known for its desalination plants, first foray into the
brick-and-motar retail sector with its budding consumer business. The Singapore-listed
company will open Elo Lab officially on 8 September 2016. This retail outlet is a physical
representation of Hyflux’s bet on the consumer water business – in particular, on a special
oxygenated water termed Elo Water.
Said to contain three times more oxygen than tap water, Elo Water was the reason
behind Hyflux's US$8 million investment in European firm Kaqun Europe in November
2015. It also forms the basis for the group's new bath facilities, as well as bottled
drinking water and skincare gels that it sells online. "Oxygen can increase the cell's ability to
generate more energy," Hyflux group chief financial officer Lim Suat Wah explained in an
interview with The Business Times. "A cell with sufficient oxygen can actually generate 15
times more energy than a cell without sufficient oxygen. So this Elo Water puts the two
together, the water element as well as the oxygen."
The venture into the consumer business came as Hyflux sought to see how water, besides
being used for daily needs, could also be used to improve health. It conducted a research and
uncovered a company which produced similar oxygenated water in the US a few years ago,
but the oxygen level in the water produced with their technology wasn't stable. On the other
hand, Kaqun was able to produce oxygenated water that contains stable oxygen levels which
can be easily absorbed into the body. This has been shown to reduce mental and physical
tiredness, according to Kaqun's website.
The oxygenated water is said to have been developed from more than 10 years of research
work by a group of doctors. Hyflux holds the exclusive rights to manufacture, sell and market
Elo Water in the Asia-Pacific, Middle East and Africa. It holds a 70 per cent stake in
Elo Water Pte Ltd with Kaqun Europe owning the rest.
"We're quite excited about this business," said Ms Lim. The group hopes to add its
proprietary membrane expertise to purify the water and also use its know-how to scale up
production of Elo Water while ensuring consistency in quality. For a start, Hyflux has
commenced clinical trials to test the properties of Elo Water. The first of these have just been
concluded, with observations of improved skin condition after the use of Elo Gel.
The clinical study, conducted by Seoul-based clinical trial institute, involved 22 women aged
49 to 52 years old who applied Elo Gel every morning and night on half their face for eight
straight weeks. During this period, skin wrinkles, colour elasticity, hydration and radiance
were observed to be "significantly improved" on the side of their faces treated with Elo Gel.
The study validated some of the observations that they have been hearing from people who
have already used it.
But even before conclusive trial results on the drinking water and bath come in – expected to
be only in 2017 – news of the products and their effects have travelled by word of mouth.
Bottles of Elo Water and Elo Gel have been snapped up, causing the company to run out of
stock of the products on occasions. A pack of six 1.5-litre bottles of Elo Water costs S$63.80
and a single tube of Elo Gel, S$68, according to its website. Still, Hyflux will not actively
market the products until it has more substantial trial results. Currently, the business in Elo
Water still remains small, as Hyflux only sells them in Singapore via an online channel.
The firm is hoping that Elo Water might bring a new breath of life to its business and
broaden Hyflux's reach to a new group of customers – consumers. How large the business
could grow into would depend on the number of cities Hyflux moves into. More investment
will also be needed in marketing, IT systems and building up a logistics network.
Singapore will be the starting point for sales, and a valuable one given its credibility and
governance. "If it can be established in Singapore, then other cities and countries will look at
(Elo Water) with more trust." In 2017, the group plans to expand sales to other Asian
countries such as Malaysia and Indonesia. China, too, is on the radar, said Ms Lim. The Elo
Water is also generating interest from consumers in countries like Australia, Hong Kong,
Thailand and China. The firm has already received enquiries on when its Elo products will be
marketed there.
Hyflux is also hoping for positive clinical trial results to give the products more credibility,
especially within the medical field. Anecdotally, users have said that Elo Water helps to
improve certain medical conditions, and some medical clinics are already ordering the gel
and drinking water through the Elo Water website. Said Ms Lim: "Some heard from their
patients who tried it and went back to them, so they know that there's some effect there. But
they can't actively promote it at this time (without the clinical trial results)."When the resul ts
come out, "hopefully, at that point in time, it will take off on a larger scale", she said. In the
coming months, Hyflux will be conducting clinical trials to determine if the water can help
benefit those with diabetes and prediabetes (blood glucose levels that are higher than normal,
but not yet high enough to be diagnosed as diabetes).
For individuals such as homemaker Audrey Koh, however, personal experience alone
suffices. The 49-year-old has been drinking Elo Water for the last six months and also
finished a cycle of soaking sessions for 14 straight days. "People who have not seen me for a
year or even six months and saw me recently remark that I look as though I have lost weight,"
she said, adding her complexion has improved, and body more toned.
Asked whether the price tag would deter her from continuing on another cycle of soaking
sessions or drinking Elo Water, she said the opportunity cost of being ill is higher than the
cost of water. Ms Koh added: "How do you place a price on health?
(Adapted for academic purposes: “Hyflux dips toes into wellness, beauty market / Hyflux banks on
oxygenated water for consumer market,” by Andrea Soh, The Business Times, 6 September 2016.)

Analyse three (3) possible social and personal factors that can have an impact on a
consumer’s decision to purchase the Elo brand of oxygenated water for personal
consumption.
(30 marks)

1. The introduction of a union into a monopsony labor market will cause employment in this market to

A. Rise

B. Fall

C. Remain constant

D. Change in a manner than cannot be determined without additional info.

2. Unions may attempt to increase the demand for union workers by

A. Advocating boycotts of nonunion products

B. Lobbying for trade restrictions

C. Lobbying for laws that restriuct the availability of substitute labor inputs

D. All of the above

E. None of the above

3. As a result of the scale effect associated with a higher wage, the quantity of labor demanded is expected to

A. Fall

B. Rise

C. Remain unchanged

D. Change in an unpredictable manner

4. If a union successfully urges consumers to boycott products produced by nonunion workers, the own-wage elasticity of demand for union labor is reduced

A. Under no circumstances

B. Because the scale effect resulting from a change in the wage will be smaller in magnitude since the boycott lowers the price elasticity of demand for output

C. Because the substitution effect in the labor market resulting from a change in the wage will be smaller in magnitude since the boycott lowers the price elasticity of demand for output

D. Because labor demand falls in response to the boycott

5. union sponsored boycotts of products produced by nonunion workers will affect the elasticity of demand for union workers by affecting the

A. Substitution effect in the labor market

B. Scale effect in the labor market

C. None of the above

6. In a local labor market

A. There are many employers and employees in most local areas

B. Foreign citizens are not allowed to apply for jobs

C. Most employer and employee search is conducted at the national level

D. There are few potential employers and employees in most local areas

7. Economic theory predicts that the cost of general training will be

A. Borne by workers

B. Borne by firms

C. Shared between workers and firms

D. None of the above

8. During a recession, firms are most likely to layoff workers who possess

A. only firm-specific training

B. only general training

9. Productivity is likely to decline by more during a recession for those labor markets in which workers possess a high level of

A. General training

B. Firm-specific training

C. Either general or firm-specific training

D. None of the above

10. Suppose that some previously discouraged workers start looking for work because they become more optimistic about their prospects. The immediate effect of this is expected to be

A. An increase in the unemployment rate

B. A decrease in the unemployment rate

C. An unchanged unemployment rate

D. A reduction in the labor force participation rate

11. The introduction of government-mandated health insurance for all employees would result in a substitution effect that

A. Raises employment and increases the length of the workweek

B. Lowers employment and reduces the length of the workweek

C. Reduces employment and raises the length of the workweek

D. Increases employment and reduced the length of the workweek

12. As the wage rate increases, the quantity of labor demanded will decrease

A. Under no circumstances

B. Only if the substitution effect exceeds the scale effect

C. Only if the scale effect exceeds the substitution effect

D. As a result of both the substitution and scale effects

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