Explain the term price elasticity of demand?How is it measured?If the price elasticity is -3 and RM 200 is the marginal cost of product x,what should be the optimal sale prince?(hint:apply the mark-up rule)

Explain the term price elasticity of demand?How is it measured?If the price elasticity is -3 and RM 200 is the marginal cost of product x,what should be the optimal sale prince?(hint:apply the mark-up rule)

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter20: Elasticity: Demand And Supply

Section: Chapter Questions

Problem 11E: The price elasticity of the demand for gasoline is -0.02. The price elasticity of demand for...

See similar textbooks

Related questions

Q: The demand in market 1 is D1 = 24 - P1 The supply in market 1 is S1 = -2 + P1 The demand in…

A: Given function D1=24-P1 S1=-2+P1 D2=16-P2 S2=2+P2 Cost of transportation Pt=2

Q: The most frequent argument used to support trade barriers is that they O protect domestic jobs O…

A: Trade barriers refer to policies such as import tariffs and quotas.

Q: A family now has four kids, and their subcompact car just is not big enough for the kids and dog.…

Q: Year/Age (%) 1981 1989 1996 2007 2008 2009 2010 Children < 18 years 12.6 11.9 18.4 9.5 9.0 9.4 8.2…

A: According to the world bank organization, Poverty refers to hunger. Poverty refers to a lack of…

Q: What is the meaning of the term ‘the tragedy of the commons’? Discuss examples of ‘tragedy of the…

A: The tragedy of the commons basically refers to a term that is used in economics to describe a…

Q: Let W represents an individual's annual earned income and U(W) = (W/10)0.5 is this individual's von…

A: A individual or business seeking insurance against specific risks pays an insurance provider an…

Q: Hyundai USA has numerous robotic welders as well as robotic checkers with vision. One underbody…

A: Initial Cost = 1200000 Savings per year = 500000 Expenses = 120,000 7 year property class has…

Q: Which of the following indexes are best suited to adjusting medical spending for inflation for the…

A: Health economics is significant because it focuses on how stakeholders' and receivers' economic…

Q: What could be the best explanation to support the decision of the United States regarding its…

A: Political economics studies how the political and economic systems are dependent across borders.

Q: for example) can be thought of as acts that have immediate gains but run the risk of long-run costs.…

A: We show that Committing a crime, such as burglary, is essentially a mirror image of an investment in…

Q: he cost structure for iPhones are as follows, fixed cost of $25 and variable cost per unit of $2.…

A: Note: "Since you have posted three different questions and the first question is incomplete so we…

Q: Absolute Advantage

A: Absolute advantage is the abitlity of the country to produce a product more effeciently than another…

Q: A project costing P250,000 yields a yearly benefit of P80,000 for a period of 10 years with no…

A: Conventional Benefit cost ratio =Present worth of Expected BenefitPresent worth of Expected cost

Q: he marginal product of labor is the Question 6 options: a) increase in total cost…

A: Macroeconomics refers to the branch of economics dealing with the performance, structure, behavior,…

Q: A machine has a 1st cost of P 140,000 and a life of 8 years with a salvage value of P10,000 at the…

A: In the Double decline balance method, the asset depreciates more in the early year after buying and…

Q: a. What are Caroline’s explicit and implicit costs? b. What is Caroline’s accounting profit? What…

A: (Solving the first question). Answer 1: a. Explicit costs are those costs which are required to…

Q: Q2. Consider the simple Keynesian model of income Determination Ct = Bo + B₁Yt + Me 0<B₁<1 Y₁ = C₁ +…

A: First of all, we have to know the term simultaneous equation model. Simultaneous equation model is a…

Q: 2. Describe and illustrate the relationship between each of the follow curves i. ATC, AVC and AFC…

A: The sum of all expenses incurred by the company to manufacture and sell all output is known as the…

Q: The management of a soft drink company is interested in determining whether the proper amount of…

A: Null Hypothesis(H0) is a statistical inference that states that in a model with DV (dependent…

Q: How does perfect competition address the problems of Allocative and Productive efficiency? Assume…

A: In a theoretical market system known as perfect competition, there are numerous customers and…

Q: Suppose that the monthly cost, in dollars, of producing x chairs is C(x)=0.005x³ +0.07x² + 19x +…

A: Marginal cost is the additional cost required in order to produce an additional unit of output.

Q: For a manufacturer of cameras and film, the total cost c of producing qc cameras and q units of film…

A: Cost function: cost function explains the relationship between the quantity and price. It tells the…

Q: (16) The use of advertising or other promotions to convince buyers that the product is unique is @…

A: Production differentiation is a strategy used by businesses to set their products apart from those…

Q: 2. What should be the value of a so that Player 1 will have a dominant strategy? PLAYER 2 C D (3,4)…

A: A strategy is said to be dominated strategy for a player if this strategy is optimal among all…

Q: 104 100 LRAS, A LRAS₂ B SRAS, SRA AD,

A: Productive capacity is the maximum possible outcome a economy can produce from its resources and…

Q: The minimum wage is an example of O a price ceiling a command economy a price floor the free market

A: The minimum wage refers to a lowest remuneration that employers will be legally paying to their…

Q: There are two countries in the world: Happytimes and Treehausland. Both countries currently have a…

A: GDP refers to the sum total of the market value of final goods and services produced in a country…

Q: Consider the macroeconomic model show C= 1,500+0.80Y 1= 2,000 G=1,250 NX-500 Y=C+I+G+NX Fill in the…

A: Aggregate expenditure is the sum of consumption, investment, government spending, and net export.…

Q: The equation for a supply curve is P = 3Q - 8. What is the elasticity in moving from a price of 4…

A: Price elasticity of supply: It measures the percentage change in the quantity supplied for a 1%…

Q: How will each of the following scenarios impact the market for labour The government reduces payroll…

A: The labor market or market for labor is a place where the labor and the employer meet. The…

Q: 9. Refer to Table 14-1. The marginal revenue from producing the 3rd unit equals (i) $6. (ii) the…

A: The money made from the sale of an item or service is referred to as revenue. The public's taxes and…

Q: An asset is purchased for P 90,000. Its estimated life is 10 years, after which is will be sold for…

A: Cost of Asset = 90,000 n = 10 Years Sales price = 1000

Q: How can analysis of national competitiveness explain the competitive advantage an SME firm is…

A: Small and the mid sized enterprises or SMEs are referred to the businesses which can maintain…

Q: 14 All of the following Examples of price discrimination Except a. bi C. di occupational discounts…

A: Occupational discounts is an example of price discrimination as different people with different…

Q: The CBO estimates that unemployment would increase by 0.3%, which is the same as saying the average…

A: Decline in unemployment rate = 0.3% Which implies ,' Working hours decline = 0.3% Original Working…

Q: The closer a market's Herfindahl - Hirschman Index (HHI) is to there are firms in the market. A.…

A: HHI (also known as Herfindahl–Hirschman Index) refers to approach to measure the size of firms in…

Q: a) Some consumers strongly prefer Coke and some strongly prefer Pepsi. Statement: this means that…

A: If the preferences over two products are made relative to each other, it is not necessary for those…

Q: Consider the following two lotteries: L4: 50% chance of winning £1,000, 50% chance of winning…

A: A person is risk neutral if he/she considers only the Expected Value of lottery ticket. Risk averse…

Q: Table 2 shows the price for various consumer goods and services for 2020 and 2021. Table 2 Category…

A: Category Weights Price 2020 Price 2021 Answer for A Food, Bev, and tobacco 31.9 3 3.5 Clothing…

Q: For th below two machines and based on AW analysis which machine we should select? MARR=10% Machine…

A: Machine A Machine B First Cost 26,612 140,454 Annual Cost 12,417 7,170 Salvage Value 4,135 -…

Q: Which of the following is most likely to be a monopoly? local fast-food restaurant local electricity…

A: Monopoly is known as a market structure in which only one seller exists who has complete market…

Q: Good X IC₂ IC₁ Good Y

A: Budget constraint: given the price of 2 goods and consumer’s income. The budget constraint shows…

Q: Question 3. In this question, we consider optimal policy to Covid in IS-LM framework. Suppose that…

A: In the IS-LM model,IS curve refers to the investment saving curve.LM curve refers to the liquidity…

Q: 7. Refer to Figure 14-1. Firms will be earn losses in the short run but will remain in business if…

A: A competitive market is one in which no single customer or producer has sway over the market. Its…

Q: Question 1 The fourth moment of the distribution of a random variable is known as: A) Kurtosis B)…

A: A random variable is a numerical representation of the result of an experiment in statistics. A…

Q: You see the following rates for NZD (New Zealand dollars) versus AUD (Australian dollars) in the…

A: Covered Interest Arbitrage : Borrow NZD 1 million @ 3% 6 months NZD interest rate. At the end of…

Q: The aggregate production function is y=3KL. If they are 30 units of capital and 40 units of labor,…

A: Production function shows the relationship between inputs and output produced.

Q: Eleanor is head of the corporation's accounting department. In an organizational chart she would be…

A: An organizational chart defines the internal position of the employees/people in an organization. It…

Q: Price Quantity Supplied (packs) Quantity demanded (packs) K80 100 500 K90 150 450 Price…

A: Elasticity of demand measures the percentage change in quantity demanded due to some change in the…

Q: Which of the following is NOT true? At the minimum-cost output, the marginal cost curve crosses the…

A: DISCLAIMER “Since you have asked multiple question, we will solve the first question for you. If…

Question

Video Video

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

The price elasticity of the demand for gasoline is -0.02. The price elasticity of demand for gasoline at Joe’s 66 station is -1.2. Explain what might account for the different elasticities.
In an attempt to increase revenues and profits, a firm is considering a 4 percent increase in price and an 11 percent increase in advertising. If the price elasticity of demand is 1.5 and the advertising elasticity of demand is +0.6, would you expect an increase or decrease in total revenues?
The Stopdecay Company sells an electric toothbrush for $25. Its sales have averaged 8,000 units per month over the past year. Recently, its closest competitor, Decayfigh ter, reduced the price of its electric toothbrush from $35 to $30. As a result, Stopde cays sales declined by 1,500 units per month. What is the arc cross elasticity of demand between Stopdecays toothbrush and Decayfighters toothbrush? What does this indicate about the relationship between the two products? If Stopdecay knows that the arc price elasticity of demand for its toothbrush is 1.5, what price would Stopdecay have to charge to sell the same number of units as it did before the Decayfighter price cut? Assume that Decayfighter holds the price of its toothbrush constant at $30. What is Stopdecays average monthly total revenue from the sale of electric toothbrushes before and after the price change determined in part (b)? Is the result in part (c) necessarily desirable? What other factors would have to be taken into consideration?
If automobiles and gasoline are complements, then their cross-elasticity coefficient is a. strictly greater than 1. b. positive. c. equal to zero. d. negative.
If the midpoint on a straight-line demand curve is at a price of $7, what can we say about the elasticity of demand for a price change from $12 to $10? What about from $6 to $4?
Suppose Erin, the owner-manager of a local hotel projects the following demand for her rooms: a. Calculate the price elasticity of demand between 90 and 110. b. Is the price elasticity of demand between 90 and 110 elastic, unit elastic, or inelastic? c. Will Erins total revenue rise if she increases the price from 90 to 110? d. Calculate the price elasticity of demand between 110 and 130. e. Is the price elasticity of demand between 110 and 130 elastic, unit elastic, or inelastic? f. Will Erins total revenue rise if she increases the price from 110 to 130?
Along a segment of the demand curve where the price elasticity of demand is less than 1, a decrease in price a. is impossible. b. will increase total revenue. c. will decrease total revenue. d. decreases quantity demanded.
(Calculating Price Elasticity of Demand) Suppose that 50 units of a good are demanded at a price of Si per unit. A reduction in price to $0.20 results in an increase in quantity demanded to 70 units. Using the midpoint formula, show that these data yield a price elasticity of 0.25. By what percentage would a 10 percent rise in the price reduce the quantity demanded, assuming price elasticity remains constant along the demand curve?
The price elasticity of demand for personal computers is estimated to be 2.2. If the price of personal computers declines by 20 percent, what will be the expected percentage increase in the quantity of computers sold?