Explain the following question by logical answers(a)Explain why the cross elasticity of demand for substitute goods is positive and the crosselasticity of demand for complements is negative.(b)Explain why the price elasticity of demand changes along a linear demand curve.(c)Why the demand curve is perfectly elastic in perfect competition?(d)Law of diminishing marginal utility is especially applicable in agriculture sector. Comment

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ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Multiple Choice question if in the short run the demand for transit by train is inelastic and in the long run the demand is elastic, then a price: a.increase will increase total revenue in the short run but decrease total revenue in the long run. b.decrease will decrease total revenue in the short run and decrease total revenue in the long run. c. increase will decrease total revenue in the short run but increase total revenue in the long run. d.decrease will increase total revenue in the short run but decrease total revenue in the long run.
9. Demand for corn is known to be inelastic. If seed gene modification enhances the crop yield per acre, what do you expect to happen to total revenue in the corn industry? a) Total revenue will decrease. b) Total revenue will increase.
20. Paulina sells beef in a competitive market where the price is $6 per pound. Her total revenue and total costs are given in the table below. Fill out the table. At what quantity does marginal revenue equal marginal cost? What is the profit-maximizing quantity?
27) A firm in a perfectly competitive market has no control over price because A) there is free entry and exit from the industry. B) every firm's product is a perfect substitute for every other firm's product, and there is a very large number of firms in the industry. C) the government imposes price ceilings on the products produced in perfectly competitive industries. D) the market demand for products produced in perfectly competitive industries is perfectly elastic.
demand is (are) created by customers and include(s) the demand for finished products and replacement parts? Dependent Independent Both dependent and independent Neither dependent nor independent
About 100 million pounds of jelly beans are consumed in the U. S. each year, and the price has been about 50 cents per pound. However, jelly bean producers feel that their incomes are too low and have convinced the government that price supports are in order. The government will therefore buy up as many jelly beans as necessary to keep the price at $1 per pound. However, government economists are worried about the impact of this program because they have no estimates of the elasticities of jelly bean demand or supply. 1. Given the market data shown in the graph, the price support costs the government $ ___ million. 2. Which of the following would increase the cost of the program? A) The demand curve becomes relatively more elastic. B) The supply curve becomes relatively more elastice. C) The supply curve becomes relatively mor inelastic. D) Both A and C. E) Both A and B. 3. Draw a new supply or demand curve in such a way the price support causes the greatest loss in consumer surplus.…
5
Q79 A reason why product X has a relatively high price elasticity of demand in the short run is that... a. There are many substitutes for product X in the short run. b. There are few substitutes for product X in the short run. c. The prices of substitute products are constant. d. The price of product X is too low. e. The share of income devoted to product X is low.
Supply curves tend to be more ______ the greater the time period facing the producer. A) Price -in elastic B) price- elastic C) steeply sloped D) infkexi
The following table contains a monthly demand and supply schedule for large. single-topp• ng, carry-out pizza Price of pizza (per pack) Quantity demanded for pizza (per pack) Quantity supplied for pizza (per pack) Quantity demanded for good Y $21 6000 7900 6000 $17 7000 7200 8000 $19 8000 6500 10000 (A) Derive the market demand and market supply function for the carry-out pizza? (B) What Is the equilbrium price and quantity for the above market? Leave your answer in 2 decimal place (if any) C Suppose the price of a conplement good to pizza has fallen. Sketch a diagram that shows the effect of the above to the market equilbnum for pizza. Briefly explan the changes
Ethanol is again viewed as one part of a solution to the problem of shortages of petroleum products. Ethanol is made from a blend of gasoline and alcohol derived from corn or sugarcane. This program can be expected to Show Transcribed Text 3. Exercise 10.4 the price of sugarcane. Ethanol is again viewed as one pa alcohol derived from corn or suga This program can be expected to J not change C increase n to the problem of shortages of petroleum products. decrease the price of sugarcane.
(a) Find the point (A, B, C, D, or E) that corresponds to the profit maximizing price and quantity. (Select only one letter.) (b) Which number corresponds to consumer surplus on the graph?

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