Elasticity of Software The Valve Corporation, a softwareentertainment company, recently ran a holiday sale on its popu-lar Steam software program. Using data collected from the sale,it is possible to estimate the demand corresponding to variousdiscounts in the price of the software. Assuming that the origi-nal price was $40, the demand for the software can be estimatedby the functionq = 3,751,000p-2.826where p is the price and q is the demand. Calculate and interpretthe elasticity of demand. Source: codinghorror.com.

The elasticity of demand measures the responsiveness of percentage change in quantity demanded due…

Answered: Elasticity of Software The Valve…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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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)
A microchip company is looking at new product lines and is reviewing the findings of its marketing team. The second product, a semiconductor microchip, has the elasticity of demand function: E(p)=√p^2-6p+5. If they set the price at $5.35 will the demand be elastic or inelastic? To increase the revenue should they raise the price or lower it?
The demand for product X depends on the price of product X as well as the average household income (Y) according to the following relationship Qdx=800-5P+0.001Y The supply of product X is positively related to own price of product X and negatively dependent upon W, the price of some input. This relationship is expressed as: Qsx= 100+ 45 P-4 W Given that Y = 50,000 and W= 4, what is the 1. Equilibrium price? Number 2. Equilibrium quantity? Number Suppose that income increases to 60,000 and W remains constant. What is the new: 3. Equilibrium price? Number 4. Equilibrium quantity? Number Assuming that income remains constant at 60,000 and W increases to 9, what is the new: 5: Equilibrium price? Number 6. Equilibrium quantity? Number
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.
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An estimate of the demand function for household furniture produced the following results: F = 0.0036 Y1.35 R0.19 P(-0.48) where F = furniture expenditures per household Y = disposable personal income per household R = value of private residential construction per household P = ratio of the furniture price index to the consumer price index The point price elasticity for household furniture is -0.48 T² = 0.996 and the income elasticity is ▼ According to the estimated model, a 10 percent increase in the value of private residential construction per household demanded by percent. the quantity
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Consider the demand function for good1, Q1 = 2536 - 8P1 + 0.6000000000000001P2 - 1.75P3 + 0.05Y Where, price of good1 (P1) is 42, price of good2 (P2) is 197, price of good3 (P3) is 155, and income (Y) is 47792; (a) Find the price elasticity of demand (PED). (b) Find the income elasticity of demand (YED). (c) Find the cross-price elasticity of demand (XED) between good1 and good3. (d) Estimate the percentage change in the demand for good1 resulting from a 6% decrease in the price of good2. (e) Based on the value of YED, comment on the nature/type of the goods. (f) Based on the value of the XED between good 1 and good3, comment on the relationship between these two goods.Iknow its more than three questions but whoever solve 1,2,3 will able to solve rest. please solve all.

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