1. A college raises its annual tuition from $23,000 to $24,000, and its student enrollment falls from 4,877 to 4,705. Compute the price elasticity of demand. Is demand for the college elastic or inelastic? 2. As the price of good X rises from $10 to $12, the quantity demanded of good Y rises from 100 units to 114 units. Are X and Y substitutes or complements? What is the cross elasticity of demand?
1. A college raises its annual tuition from $23,000 to $24,000, and its student enrollment falls from 4,877 to 4,705. Compute the price elasticity of demand. Is demand for the college elastic or inelastic? 2. As the price of good X rises from $10 to $12, the quantity demanded of good Y rises from 100 units to 114 units. Are X and Y substitutes or complements? What is the cross elasticity of demand?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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1. A college raises its annual tuition from $23,000 to $24,000, and its student
enrollment falls from 4,877 to 4,705. Compute the
demand
2. As the price of good X rises from $10 to $12, the quantity demanded of
good Y rises from 100 units to 114 units. Are X and Y substitutes or
complements? What is the cross elasticity of demand?
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