a) Assume traditional cameras are inferior goods. Everything else held constant, what will happen to the equilibrium price and quantity of traditional camera if consumers experience an increase in income and more firms decide to manufacture traditional camera film? Provide brief explanationb)Everything else held constant, a 4 percent increase in the price of a new traditional camera causes a 28 percent decrease in quantity demanded for the same. Calculatethe price elasticity of demand for a new traditional camera. For part (b), explain briefly whether the revenue will increase or decrease?

Inferior commodities are those whose demand falls as the income of the people rises.

Answered: a) Assume traditional cameras are…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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a) Assume traditional cameras are inferior goods. Everything else held constant, what will happen to the equilibrium price and quantity of traditional camera if consumers experience an increase in income and more firms decide to manufacture traditional camera film? Provide brief explanation

Everything else held constant, a 4 percent increase in the price of a new traditional camera causes a 28 percent decrease in quantity demanded for the same. Calculate

the price elasticity of demand for a new traditional camera. For part (b), explain briefly whether the revenue will increase or decrease?

Definition Video Definition Point where the demand and supply curves intersect. At the equilibrium price the quantity supplied of a good is equal to the quantity demanded. When the market is not in equilibrium, market surplus or market shortage occurs. The region that is above the price equilibrium indicates market surplus and the region below the price equilibrium indicates market shortage. Video

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