4. Suppose a consumer would have 5 dental visits a year at the price of $20. When the price rises to $100 per visit, she visits the dentist 3 times a year. Below is the demand curve for this consumer. Demand 200 150 50 5, 20 2 3 Quantity A. Calculate the slope of the demand curve. B. What is the demand elasticity from $100 per visit to $20 per visit? Show your calculation. C. Use the slope to calculate how many times will the consumer visit the dentist if he is completely insured? Price 3,100

4. Suppose a consumer would have 5 dental visits a year at the price of $20. When the price rises to $100 per visit, she visits the dentist 3 times a year. Below is the demand curve for this consumer. Demand 200 150 50 5, 20 2 3 Quantity A. Calculate the slope of the demand curve. B. What is the demand elasticity from $100 per visit to $20 per visit? Show your calculation. C. Use the slope to calculate how many times will the consumer visit the dentist if he is completely insured? Price 3,100

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

4. Suppose a consumer would have 5 dental visits a year at the price of $20.
When the price rises to $100 per visit, she visits the dentist 3 times a year.
Below is the demand curve for this consumer.
Demand
250
200
150
100
50
0
Price
3,100
5, 20
0
2
4
5
6
Quantity
A. Calculate the slope of the demand curve.
B. What is the demand elasticity from $100 per visit to $20 per visit? Show your
calculation.
C. Use the slope to calculate how many times will the consumer visit the dentist
if he is completely insured?
D. When the price of a hospital outpatient dental care visit increases by 10%,
visits to dentists increase from 1 to 3 visits. Calculate the cross-price
elasticity. Are these two products complementary or substitute goods?

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