Suppose that the price elasticity of the demand is 0.76. If we increase the price of the the demanded product, how would this affect the revenue? Explain
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5. Suppose that the price
the the demanded product, how would this affect the revenue? Explain
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- The equation for a demand curve is P=2/Q. What is the elasticity of demand as price falls from 5 to 4? What is the elasticity of demand as the price falls from 9 to 8? Would you expect these answers to be the same?From the data in Table 5.6 about supply of alarm clocks, calculate the price elasticity of supply from: point J to point K, point L to point M, and point N to point P. Classify the elasticity at each point as elastic, inelastic, or unit elastic.The equation for a supply curve is P=3Q8. What is the elasticity in moving from a price of 4 to a price of 7?
- What is the price elasticity of demand? Can you explain it in your own words?Suppose you could buy shoes one at a time, miter than in pain. What do you predict the cross-price elasticity for left shoes and right shoes would be?From the data in Table 5.5 about demand for smart phones, calculate the price elasticity of demand from: point B to point C, point D to point E, and point G to point H. Classify the elasticity at each point as elastic, inelastic, or unit elastic.
- What is the price elasticity of supply? Can you explain it in your own words?Can you think of an industry (or product) with near infinite elasticity of supply in the short term? That is, what is an industry that could increase Qs almost without limit in response to an increase in the price?Define the price elasticity of demand. Explain the relationship between total revenue and the price elasticity of demand.
