Suppose that the price elasticity of demand for good q is constant and equal to –1. When the price of q is $15 per unit, the total amount demanded is 600 units. If the supply is perfectly inelastic at 150 units, the equilibrium price (p) and the equilibrium quantity (q) is (a) p = 20, q = 50 (b) p = 40, q = 100 (c) p = 60, q = 150 (d) p = 80, q = 200 (e) None of the above. %3D
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- If automobiles and gasoline are complements, then their cross-elasticity coefficient is a. strictly greater than 1. b. positive. c. equal to zero. d. negative.(Calculating Price Elasticity of Demand) Suppose that 50 units of a good are demanded at a price of Si per unit. A reduction in price to $0.20 results in an increase in quantity demanded to 70 units. Using the midpoint formula, show that these data yield a price elasticity of 0.25. By what percentage would a 10 percent rise in the price reduce the quantity demanded, assuming price elasticity remains constant along the demand curve?Prove that price elasticity of demand is not the same as the slope of a demand curve.
- What does a price elasticity of demand of 0.39 mean?The price elasticity of demand for personal computers is estimated to be 2.2. If the price of personal computers declines by 20 percent, what will be the expected percentage increase in the quantity of computers sold?The demand function of a certain commodity is X = 30 2P. When the price P changes from 5 to 10, please calculate the price elasticity of demand e. (a) 0.1 (b) 0.2 (c) 0.3 (d ) 0.4 (e) 0.5 (f) 2
- Consider the demand function for bicycles in South Florida: Q = 24 + 3Y – 1.2P where: Q is quantity demanded, Y is monthly income, and P is the price per unit. If/when P = $54, and Y = $2,300, (a) Find the quantity of bicycles that would be sold. (b) Calculate the amount of the seller's total revenue. (c) Compute the price-elasticity of demand (Ep) for bicycles. (d) Interpret your result in (c). (e) Compute the income-elasticity of demand (Ey) for bicycles. (f) Interpret your result in (e).Suppose that the price per unit p as a function of the demanda is p = 478.8 -0.9x. (a) Calculate the price elasticity of demand when x = 132. n = -2.44, therefore the demand is elastic (b) Calculate the price elasticity of demand when x = 425. n = -0.202 therefore the demand is inelastic (c) Find the demand that gives unit elasticity. x = 266.0 ✓The demand for wooden chairs can be modeled as D(p) = -0.01p + 6.75 million chairs where p is the price (in dollars) of a chair. (a) Find the point of unit elasticity. The point of elasticity occurs when p = $ and D(p): = (b) For what prices is demand elastic? For what prices is demand inelastic? Demand is inelastic for < p < ■ Demand is elastic for million chairs.The demand for wooden chairs can be modeled as D(p) = -0.01p + 4.25 million chairs where p is the price (in dollars) of a chair. (a) Find the point of unit elasticity. The point of elasticity occurs whenp = $ and D(p) = million chairs. (b) For what prices is demand elastic? For what prices is demand inelastic? Demand is inelastic ford) Find the elasticity of Q with respect to P for the following functionsi) Q =1/pii) Q = √(P3)Suppose that your demand schedule for DVDs is as follows:Price: 8, 10, 12, 14, 16Demand (income =$10000) : 40, 32, 24, 16, 8Demand (income = $12000): 50, 45, 30, 20, 12a. If your income is $10,000, your price elasticity of demand as the price of DVDs rises from $8 to $10 isSEE MORE QUESTIONSRecommended textbooks for youManagerial Economics: Applications, Strategies an…EconomicsISBN:9781305506381Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. HarrisPublisher:Cengage LearningManagerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage LearningManagerial Economics: Applications, Strategies an…EconomicsISBN:9781305506381Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. HarrisPublisher:Cengage LearningManagerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning