(a) Due to the increase in the demand for video games, the equilibrium price of video games increases by 10 percent, and the equilibrium quantity increases by 5 ercent. Is the price elasticity of demand for video games elastic, inelastic, or indeterminate? Explain your answer (with calculation if possible). Is the price elasticity of supply of video games elastic, inelastic, or indeterminate? Explain your answer (with calculation if possible). (b) Suppose Marcus produces chocolate with two inputs: factory and labor. If the workers become more productive with better training, state whether the average fixed cost, average variable cost, average total cost, and marginal cost will rise or fall? (c) After one month of operation, OU Café determined to shorten its business hours and close on weekends. What costs, fixed or variable, should OU Café have considered when it made the de

The price elasticity of demand measures the % change in quantity demanded and % change in prices.…

Answered: (a) Due to the increase in the…

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) Due to the increase in the demand for video games, the equilibrium price of video games increases by 10 percent, and the equilibrium quantity increases by 5 ercent.

Is the price elasticity of demand for video games elastic, inelastic, or indeterminate? Explain your answer (with calculation if possible).
Is the price elasticity of supply of video games elastic, inelastic, or indeterminate? Explain your answer (with calculation if possible).

(b) Suppose Marcus produces chocolate with two inputs: factory and labor. If the workers become more productive with better training, state whether the average fixed cost, average variable cost, average total cost, and marginal cost will rise or fall?

(c) After one month of operation, OU Café determined to shorten its business hours and close on weekends. What costs, fixed or variable, should OU Café have considered when it made the de

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