1. Understanding the point elasticity of demandAa AaConsider the demand for books shown on the following graph.PRICE (Dollars per book)10210QUANTITY (Books per day)Fill in the following table with the slope of the demand curve at each of the given points. Recall that, because thedemand curve is downward sloping, the slope should be reported as a negative number in each row.PricePointQuantity($)SlopePoint ElasticityType of ElasticityA3B8Next, derive the point elasticity of demand at each of the points, and enter your result in the table. Round the pointelasticity value to the nearest tenth. For example, if the correct answer is -1/3 for the point elasticity, enter"-.3" in the appropriate column. (Hint: The price elasticity of demand is the percentage change in quantity dividedby the percentage change in price.) Then, fill in the last column by determining if the demand curve is elastic, unitelastic, or inelastic at each of the points.As you move along the demand curve from point C to point B, the demand curve getselastic.True or False: The point elasticity of demand is equal to the slope of the demand curve.FalseTrue

Use the Below formula to find the slope:

Answered: 1. Understanding the point elasticity…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

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1. The graph below shows the demand curve of two goods by an individual, use the information in the graph to answer the questions that follows; Price GH¢30.00 A GH¢25.00| C D1 D2 2000 2500 3000 Quantity (gallons per day) (a) Calculate the price elasticity of demand for the demand curve, D1, from point A to point C, and the price elasticity of demand for D2 from point A to point B. which demand curve is more elastic, Di or D2? Briefly explain your answer. (b) Given the expenditure function as e(p.q)=pg where p is the price and q is quantity demand. Suppose the individual was purchasing 2000 gallons per day at a price of GH¢30.00 per gallon and the price is cut to GH¢25.00 per gallon. calculate the | change in total expenditure if the demand curve of the individual is D1? What will be the change in total expenditure if demand is D2? 2. Discuss any four factors that would cause an increase in demand of petroleum engineering program in Ghanaian universities.
1. 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. Points P A 60 3,000 B 70 2,800 C 80 2,600 D 90 2,400 100 2,200 110 2,000 120 1,800 130 1,600 Table 5.5
4-6 Suppose that the price of croissants rises from $2 to $3 per unit. Use the mid-point approach to get the elasticity. answer the following The quantity of orange juice purchased falls from 10 million bottles to 5 million bottles. What is the cross-price elasticity of demand between croissants and orange juice? Are they complements or substitutes? The quantity of jelly purchased increases from 10 million jars to 20 million jars. What is What is the cross-price elasticity of demand between croissants and jelly? Are they complements or substitutes?
4. The price elasticity of demand for bracelets is 2.1. How would you interpret this? a. When the price of bracelets increases by 10% the quantity demanded of bracelets decreases by 21% b. When the price of bracelets decreases by 10% the quantity demanded of bracelets decreases by 21% c. When the price of bracelets increases by 10% the quantity demand of bracelets decreases by 2.1% d. When the price of bracelets decreases by 10% the quantity demanded of bracelets decreases by 2.1%
1. What is price of elasticity? Explain many types of price elasticity and give complete your answer with value for each type elasticity
1. Calculate the Price elasticity of demand, & for the following examples: a) Demand is given by Q = 50 – P at the price of $10. b) Demand is given by Q= 100 - P, at the price of $50. %3D c) Demand is given by Q= 25 - .25P, at the price of $40. d) Demand is given by Q = 20 - .1P, at the price of $80. e) Demand is given by Q = 60 – 1/3P, at the price of $60.
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7 2 Suppose the price of peanut butter falls from $2 to $1 per jar. Instructions: Round your answer to two decimal places and include a negative sign if appropriate. a. The quantity of jelly purchased rises from 14 million jars to 16 million jars. The cross-price elasticity of demand between peanut butter and jelly using the mid-point method is The goods are Cirktas) 3 b. The quantity of jelly purchased falls from 16 million jars to 14 million jars. The cross-price elasticity of demand between peanut butter and jelly using the mid-point method is The goods are ICICK TO MWCT)

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