1. The demand curve for a product is given by Qx= 1,200 – 3Px – 0.1Pz Where Pz SR300. What is the own price elasticity of demand when Px= SR140? Is demand elastic or inelastic at this price? What would happen to the firm's revenue if it decided to a. charge a price below SR140? b. What is the own price elasticity of demand when Px= SR240? Is demand elastic or inelastic at this price? What would happen to the firm's revenue if it decided to charge a price above SR240? c. What is the cross price elasticity of demand between good X and good Z when Px=SR140? Are good X and good Z substitutes or complements?

1. The demand curve for a product is given by Qx= 1,200 – 3Px – 0.1Pz Where Pz SR300. What is the own price elasticity of demand when Px= SR140? Is demand elastic or inelastic at this price? What would happen to the firm's revenue if it decided to a. charge a price below SR140? b. What is the own price elasticity of demand when Px= SR240? Is demand elastic or inelastic at this price? What would happen to the firm's revenue if it decided to charge a price above SR240? c. What is the cross price elasticity of demand between good X and good Z when Px=SR140? Are good X and good Z substitutes or complements?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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