**Question 5:**If the price falls from $3 to $2, and the quantity demanded rises from 200 to 400 units, compute the price elasticity of demand using the midpoint method.**Options:**A) 2.00 B) 1.67 C) 0.67 D) 0.60 **Calculate Below:**| Formula | Calculation | Answer ||----------|-------------|--------|| | | |**This good is:** - INELASTIC - ELASTIC - UNITARY ELASTIC *(circle one)*---The problem requires calculating the price elasticity of demand using the midpoint method, which involves using the average of old and new prices and quantities to determine elasticity. It asks which of the elasticity options (A-D) is correct and whether the good is inelastic, elastic, or unitary elastic.

Formula to calculate elasticity of demand:- Elasticity=Q2-Q1Q1+Q22P2-P1P1+P22 Here;…

Answered: 5. If the price falls from $3 to $2,…

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

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5) A certain product has an (own) price elasticity that is elastic, and there is a decrease inthe revenue received. What change in the quantity demanded of a product is necessary to meet theconditions of each situation when there is a 15% increase in the price of that product? Be specific (andsuggest a number).
When the price of wheat rose from $10/kg to $15/kg its demand remained costant at 100 kgs. Calculate the price elasticity of demand for wheat?
2. Suppose you have an elasticity of - 2 and the CMg of $ 15.45 per unit. Determine the pricing. CMg (marginal cost)
If the current price elasticity of demand for apples is -50, what will be the change in sales (i.e., total revenue) after a 20% price increase? Please show your calculation.
Consider the following demand schedule for movie tickets. Suppose the price of a movie ticket falls from $9 to $7. Calculate the price of elasticity of demand and identify the type of elasticity.
Back to Assignment Keep the Highest 1/2 4. Elastic, inelastic, and unit-elastic demand The following graph shows the demand for a good. Attempts 1 ❖ PRICE (Dollars per unit) 350 225 175 50 0 Region Between W and X Between X and Y Between Y and Z 1 QUANTITY (Units) True False W Demand For each of the regions listed in the following table, use the midpoint method to identify if the demand for this good is elastic, (approximately) unit elastic, or inelastic. Elastic Inelastic Unit Elastic ? True or False: The slope of the demand curve is not equal to the value of the price elasticity of demand.
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.
5. If the price elasticity of demand for a good is 1.5, we would say that its demand is a)inelastic b)elastic c)increasing d)normal
Jose owns a donut business in Los Angeles, and he wants to increase his total revenue. He knows that, when donuts are $1, he sells 200 an hour, and when he lowers the price to $0.75, he sells 280 an hour. A) Using the midpoint method, compute the price elasticity of demand for Jose’s donuts. Please show the formula used for understanding. B) Based on (A) is demand for Jose’s donuts elastic or inelastic? How do you know? Explain C) Should he raise or lower the price to generate more revenue.
Price (dollars per unit) 92 91 90 68 88 D 5 6 7 Quantity (units per day) 2 4 The figure shows a demand curve. Using the midpoint formula, the elasticity of demand moving from point A to point Bequals A) 1.00. B) 0.033. C) 2.00. D) 30
Price Elasticity of Demand 1. For each of the following pairs of goods, identify the good that you would expect to be more elastic. Briefly explain your answers (1-2 sentences). a) Eggs versus butter. b) Speedboats versus lightbulbs. c) Orange juice in general versus Tropicana brand of orange juice. d) Trips by your Congressperson to D.C. versus vacation trips by you to Hawaii.

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5. If the price falls from $3 to $2, and the quantity demanded rises from 200 to 400 units, compute the price elasticity of demand using the midpoint method. A) B) C) D) 2.00 1.67 0.67 0.60 Show your work here Formula Calculation Answer This good is INELASTIC ELASTIC UNITARY ELASTIC (circle one)