Figure 5-1 ↑ Price 10 9 8 3 Demand 6 8 10 12 14 16 18 20 22 24 26 Quantity 7. Refer to Figure 5-1. Between point A and point B, price elasticity of demand is equal to a. 0.33. b. 0.67. c. 1.5 d. 2.67. 8. Refer to Figure 5-1. Between point A and point B on the graph, demand is a. perfectly elastic. b. inelastic. c. unit elastic. d. elastic, but not perfectly elastic.

Figure 5-1 ↑ Price 10 9 8 3 Demand 6 8 10 12 14 16 18 20 22 24 26 Quantity 7. Refer to Figure 5-1. Between point A and point B, price elasticity of demand is equal to a. 0.33. b. 0.67. c. 1.5 d. 2.67. 8. Refer to Figure 5-1. Between point A and point B on the graph, demand is a. perfectly elastic. b. inelastic. c. unit elastic. d. elastic, but not perfectly elastic.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose that in a month the price of a dozen eggs increases from $1.50 to $2. At the same time, the quantity of dozens of eggs demanded decreases from 200 to 150. The price elasticity of demand for dozens of eggs is: A. Inelastic B. Unit elastic C. Perfectly inelastic D. Elastic
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7. The demand function for a product is given by q = 250-0.5p. a. Determine the price levels for which the demand is elastic. b. What do you learn from your answer to a. about the revenue? c. Find the price levels for which demand is perfectly inelastic. d. Determine the point elasticity of demand when p = 200 and classify the demand as (perfectly) elastic, (perfectly) inelastic or of unit elasticity at this price level. e. Use your answer to d. to estimate the percentage change in quantity sold when the price is lowered from 200 to 197. f. Will the changes in e. result in an increase or decrease in revenue? Explain based on your answer to d. Estimate the change in revenue, using the value for the point elasticity you found in d.
4. Elastic, inelastic, and unit-elastic demand The following graph shows the demand for a good.
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4. Graph the supply and demand curves and use the midpoint (averages) formula to calculate the respective price elasticities of supply and demand over the price range given. Then determine over what range of prices supply and demand are elastic, unit elastic, or inelastic. E₁ QS 2400 2200 1900 1500 1000 500 Price $14 12 10 8 6 4 QD ol 500 1000 1500 2000 2500 Ed
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Investigate how demand elasticities are affected by increases in demand. Apply the midpoint formula to calculate the demand elasticities. 2 0 (c) 10 0 20 30 Quantity 10 40 Given the shift in demand, the elasticity between points a' and b'in Figure a = b. The elasticity of demand for D2 between points c and dis 0.56. Given the shift in demand, the elasticity between points c'and d'in Figure b = 20 Quantity 30 D₁ 50 60 40 Instructions: In parts a, b, and c, round your answers to two decimal places. Enter your answers as a positive value (absolute value). a. The elasticity of demand for D₁ between points a and bis 1.80. D₂ (45, 4.5) 50 0 c. The elasticity I demand for D3 between points e and fis 1.00. Given the shift in demand, the elasticity between points e' and f'in Figure c = 0 0 10 20 D₂ 30 Quantity (b) 40 50