1. Mark's demand for chicken is given as follows: Price of Chicken Quantity demanded per week Quantity demanded per week (Income = P800) (Per kilo) P100 110 (Income = P500) 10 kilos 8 12 kilos 11 120 10 130 a. Compute for his price elasticity of demand as the price of chicken falls from P120 to P110 if his income is P500. (Use the Midpoint Method) b. Compute for his price elasticity of demand as the price changes from P120 to P130 if his income is P800. (Use the Midpoint Method) c. Compute his income elasticity of demand as his income changes from P500 to P800 is the price of chicken is P100.

1. Mark's demand for chicken is given as follows: Price of Chicken Quantity demanded per week Quantity demanded per week (Income = P800) (Per kilo) P100 110 (Income = P500) 10 kilos 8 12 kilos 11 120 10 130 a. Compute for his price elasticity of demand as the price of chicken falls from P120 to P110 if his income is P500. (Use the Midpoint Method) b. Compute for his price elasticity of demand as the price changes from P120 to P130 if his income is P800. (Use the Midpoint Method) c. Compute his income elasticity of demand as his income changes from P500 to P800 is the price of chicken is P100.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

How do you determine which prices to use when finding the cross-price elasticity of two products?
Someone tells you the "absolute value" of the cross price elasticity of two substitutes like Coke and Pepsi is 2.40. Based on this information, what percent change in the price of Coke will cause the quantity demanded of Pepsi to increase by 3%.
(0.2) and that the rate of change of price to price is equal to (0.173) *. The elasticity of demand for the commodity is The elasticity of demand is (1). O The elasticity of demand is (2). 0 The elasticity of demand is (0.156) The elasticity of demand is (1.156) 0
Quantity of T-shirts demanded (Average tourist income = RM7,000/month) Quantity of T-shirts demanded (Average tourist income = RM14,000/month) 3000 Price of T-shirt (RM) 16 5000 20 4200 2400 24 3000 1600 28 1800 800 A. calculate the price elasticity of demand if the price of a T-shirt rises from RM20 to RM24 and the average tourist income is RM7,000 by midpoint method B. Based on Q(A), compute the price elasticity of demand if the average tourist income is RM14,000.
am. 111.
1. Given the demand function: Qd = 520 – 40P Solve for the price elasticity of demand between P = 8 and P = 12. Determine whether demand is price elastic, price inelastic or unit elastic. 2. Suppose that boys and girls have the following demand for burgers. Price Quantity Demanded (boys) Quantity Demanded (girls) $400 4,000 1,600 $500 3,800 1,200 Solve for the price elasticity of demand of the boys and girls. Determine whether demand is price elastic, price inelastic or unit elastic.
The accompanying table lists the cross-price elasticities of demand for several goods, where the percent quantity change is measured for the first good of the pair, and the percent price change is measured for the second good. ( please see image) a. Explain the sign of each of the cross-price elasticities. What does it imply about the relationship between the two goods in question? b. Compare the absolute values of the cross-price elasticities and explain their magnitudes. For example, why is the cross-price elasticity of McDonald’s burgers and Burger King burgers less than the cross-price elasticity of butter and margarine? c. Use the information in the table to calculate how a 10% increase in the price of Pepsi affects the quantity of Coke demanded. d. Use the information in the table to calculate how a 5% decrease in the price of gasoline affects the quantity of SUVs demanded.
Point on Demand Curve: A B C D E F G H I Price (P): $40 $35 $30 $25 $20 $15 $10 $5 $0 Quantity Demanded (QD): 0 5 10 15 20 25 30 35 40 b) Calculate the price elasticity of demand between each set of points on the demand curve (i.e., between A and B, B and C, C and D, D and E, etc.) (c) explain how and why the price elasticity of demand changes as you move along this demand curve. how and why the effect of price changes on total revenue is tied to elasticity.
1/a) Suppose the price of flour increases from $0.60 to $1.10 a pound and the quantity demanded decreases from 100 pounds to 60 pounds. Using the midpoint method, what is the price elasticity of demand for flour? Is the demand for flour elastic or inelastic? b) A 15 percent increase in income brings about a 25 percent decrease in the demand for a good. What is the income elasticity of demand and is the good a normal good or an inferior good?
What is the formula for the price elasticity of demand? The percentage change in the A) quantity demanded divided by the percentage change in the price of a substitute or complement. B) quantity demanded divided by the percentage change in price. C) quantity demanded divided by the percentage change in income. D) quantity supplied divided by the percentage change in price.
2. The demand function for a certain item is given by D (p) = 1000 - p³ Find the elasticity of demand to decide if the manufacturer should raise or lower the price from the current price of $5?
None