1. Annual purchases of laptop computers price of $3000, 20 000 at a price of $2000, and 30 000 at a price of $1000. a. Draw a graph showing this demand curve. Plot three points to draw the curve. b. Find sellers' total revenue at each price. c. On the basis of your answer to part b, is the market demand curve for laptop computers elastic or inelastic in the price range $3000 to $2000? in the price range $2000 to $1000? d. Calculate the numerical values of price elasticity of demand, e, in the two relevant price ranges using the formula found in the chapter. e. Are your answers to parts c and d for the two relevant price ranges

1. Annual purchases of laptop computers price of $3000, 20 000 at a price of $2000, and 30 000 at a price of $1000. a. Draw a graph showing this demand curve. Plot three points to draw the curve. b. Find sellers' total revenue at each price. c. On the basis of your answer to part b, is the market demand curve for laptop computers elastic or inelastic in the price range $3000 to $2000? in the price range $2000 to $1000? d. Calculate the numerical values of price elasticity of demand, e, in the two relevant price ranges using the formula found in the chapter. e. Are your answers to parts c and d for the two relevant price ranges

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

1. Annual purchases of laptop computers in a certain market are 10 000 at a
price of $3000, 20 000 at a price of $2000, and 30 000 at a price of
$1000.
a. Draw a graph showing this demand curve. Plot three points to draw the
curve.
b. Find sellers' total revenue at each price.
c. On the basis of your answer to part b, is the market demand curve for
laptop computers elastic or inelastic in the price range $3000 to
$2000? in the price range $2000 to $1000?
d. Calculate the numerical values of price elasticity of demand, e, in the
two relevant price ranges using the formula found in the chapter.
e. Are your answers to parts c and d for the two relevant price ranges
consistent?
2. Calculate the appropriate elasticity coefficient in each of the following
cases using the relevant formula outlined in the chapter.
a. A drop in the price of hybrid cars from $25 000 to $20 000 causes
purchases of gasoline-powered cars to fall from 1 million to 750 000
per year.
b. Monthly purchases of smartphones rise from 15 000 to 17 500 when
the average price of smartphones decreases from $500 to $400.
c. A fall in average consumer incomes from $80 000 to $50 000 raises
weekly purchases of canned sardines from 2000 to 3000 cans.
1.
C
C

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