6. Elasticity and total revenueThe following graph illustrates the weekly demand curve for motorized scooters in Roanoke.Use the green rectangle (triangle symbols) to compute total revenue at various prices along the demand curve.Note: You will not be graded on any changes made to this graph.TOTAL REVEN$700 T810075000900630057005100PRICE (Dollars per scooter)450030003258 8 8 8 28 28 28 %300275250225200+175150+12510075On the following graph, use the green point (triangle symbol) to plot the weekly total revenue when the market price is $50, $75, $100, $125, $150,$175, and $200 per scooter.252300++00AAB+DemandemanoHon MIM 110 150 135HHHH++ +25 50 75 100 125 150 175 200 225 250 275 300 325PRICE (Dollars per scooter)-ATotal RevenueTotal Revenue(?)(?) According to the midpoint method, the price elasticity of demand between points A and B is approximatelySuppose the price of scooters is currently $200 per scooter, shown as point A on the initial graph. Because the demand between points A and B isa $25-per-scooter decrease in price will lead toin total revenue per week.In general, in order for a price decrease to cause a decrease in total revenue, demand must be

Demand elasticity measures how sensitive a good's quantity desired is to variations in its price. It…

According to the midpoint method, the price elasticity of demand between points A and B is approximately Suppose the price of scooters is currently $200 per scooter, shown as point A on the initial graph. Because the demand between points A and B is a $25-per-scooter decrease in price will lead to in total revenue per week. In general, in order for a price decrease to cause a decrease in total revenue, demand must be

According to the midpoint method, the price elasticity of demand between points A and B is approximately Suppose the price of scooters is currently $200 per scooter, shown as point A on the initial graph. Because the demand between points A and B is a $25-per-scooter decrease in price will lead to in total revenue per week. In general, in order for a price decrease to cause a decrease in total revenue, demand must be

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: Suppose the initial demand at the price of $10 was 100. When the price rises to $12, the demand drops to 30. Find the price elasticity of the demand. Is the demand elastic or inelastic in this price range? Will the revenue increase or decrease as the result of this price change? Justify your answer. B:. Using calculus, calculate the price elasticity of the following demand functions: D(p)=10-2ln(p) and D(p)=7p -3 . C: Suppose now that the demand is D(p)=12-3p. At what price is the revenue maximized? What is the maximum revenue? What is the price elasticity of demand at this price?
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Suppose that the price per unit p as a function of the demand is p=√1056 - 2x. (a) Calculate the price elasticity of demand when = 305. 305 therefore the demand is elastic 1056 - 2(305) n = (b) Calculate the price elasticity of demand when x = 406. 406 1056 - 2(406) η = therefore the demand is inelastic (c) Find the demand x that gives unit elasticity. x = 528
Suppose a research report has estimated the demand for a firm's product as ln QXd = 7 − 1.5 ln PX + 2 ln PY − 0.5 ln M + ln A where:Px = $15Py = $6M = $40,000, andA = $350 a. Determine the own price elasticity of demand, and state whether demand is elastic, inelastic, or unitary elastic. Own price elasticity: -1.5 Demand is: elastic b. Determine the cross-price elasticity of demand between good X and good Y, and state whether these two goods are substitutes or complements. Cross-price elasticity: 2 These two goods are: Substitutes. c. Determine the income elasticity of demand, and state whether good Xis a normal or inferior good. Income elasticity: Good X is: d. Determine the own advertising elasticity of demand.
i. ii. iii. Suppose the demand function for a product is given by (3000-9 where p is in hundreds of RM and q is the number of tons. Determine the point elasticity of demand when the quantity demanded is 6 tons. is demand elastic, is it inelastic, or does it have unit elasticity at this point? Approximate the percentage change in price if the demand of 6 tons is decreased by 3%.
Answer only subpart 4
The quantity demanded each month of Russo Espresso Makers is 250 when the unit price is $140. The quantity demanded each month is 1000 when the unit price is $110. The suppliers will market 750 espresso makers when the unit price is $76 or higher. At a unit price of $96, they are willing to market 2250 units. Both the supply and demand equations are known to be linear. (a) Find the demand equation. P = (b) Find the supply equation. p= (c) Find the equilibrium quantity and the equilibrium price. units $
Consider the demand function for good1, Q1 = 2037 - 9P1 + 0.6000000000000001P2 - 0.75P3 + 0.07Y Where, price of good1 (P1) is 59, price of good2 (P2) is 255, price of good3 (P3) is 195, and income (Y) is 24425; (a) Find the price elasticity of demand (PED). (Give your answer to two decimal places) (b) Find the income elasticity of demand (YED). (Give your answer to two decimal places) c) Find the cross price elasticity of demand (XED) between good1 and good3. (Give your answer to east two decimal places) d) Estimate the percentage change in the demand for good1 resulting from a 4% decrease in the price of good2. (Give your answer to two decimal places, if required)
Exercise : Following an increase in it's price, from 10$ to 12$, the demand for a good falls from 10500 to8100 units.What elasticity of demand would you estimate from these data? Calculate its value, first by using the general formula (for discrete changes), then by assuming a constantconstant elasticity of demand (log formula).Calculate the demand for p=9 (note q9 the quantity for p=9), using the general formula then in log of the elasticity calculated in Now, Knowing the value of the direct price elasticity of demand calculated previously, assuming constant costs andcosts and rivals not responding to your price cut, would you have recommended the price cut from 10 to 9?price cut from 10 to 9 ?
Suppose the supply and demand curves for a particular product are given by: QS = -20 + 2P QD =100 - 2P where QS and QD are quantities in units and P is the price per unit. (b) Calculate both the demand and supply elasticity around the equilibrium point. [Hint: you can use either the point method or the average arc (midpoint) method.] [5]
Consider the following demand function: 500 p(q) : (q + 290)? (a) Find the point elasticity n(g) as a function of q. The point elasticity function n(q): (b) Find the point elasticity at q = 520. Note: Point elasticity is typically a negative quantity. (c) Determine whether the demand is elastic, or inelastic, or has unit elasticity at q = 520. The demand is ? at q = 520.
According to the reading "Gasoline Consumption in the US and Norway", the estimate for the long- run price elasticity of demand was Ed=1.44. We also know that there is better access to public transportation in Norway than in the US. So, this estimate likely the true long-run price elasticity of demand for gasoline. In other words, if the public transit system in Norway was the same as in the US, a 1% increase in the price of gas would reduce the quantity demanded in the long-run by. than 1.44%. (Fill in the blanks.) O Overstates, more. Overstates, less. Overstates, more. O Understates, less.