Hey, I have a question on part D of question 5. I saw the answers that are available but the answer and explanation didn’t make sense. I got inelastic as my answer but Bartley said the answer is elastic. This is the modern principles of microeconomics 4th edition and the chapter is 5, elasticity and it’s applications c. The supply curve for plastic if a very largeshare of oil output was used to make plastic.d. The supply curve for nurses after severalyears of increasing wages in nursing. no5. Let's work out a few examples to get a sense927 of what elasticity of demand means in prac-tice. Remember that in all of these cases, we'removing along a fixed demand curve-so thinkof supply increasing or decreasing, while theVan demand curve is staying in the same place.gaiva. If the elasticity of demand for college text-books is -0.1 and the price of textbooksincreases by 20%, how much will the quantityegnede demanded change, and in what direction?b. In your answer to part a, was your answer intopercentages or in total number of textbooks?c. If the elasticity of demand for spring break1 packages to Cancun is -5, and if you noticethat this year in Cancun the quantity ofpackages demanded increased by 10%, thenwhat happened to the price of Cancun vaca-tion packages?d. In your college town, real estate developersare building thousands of new student-friendly apartments close to campus. If youashwant to pay the lowest rent possible, shouldyou hope that demand for apartments isrelatively elastic or relatively inelastic?

Answered: Hey, I have a question on part D of…

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Hey, I have a question on part D of question 5. I saw the answers that are available but the answer and explanation didn’t make sense. I got inelastic as my answer but Bartley said the answer is elastic. This is the modern principles of microeconomics 4th edition and the chapter is 5, elasticity and it’s applications

c. The supply curve for plastic if a very large
share of oil output was used to make plastic.
d. The supply curve for nurses after several
years of increasing wages in nursing. no
5. Let's work out a few examples to get a sense
927 of what elasticity of demand means in prac-
tice. Remember that in all of these cases, we're
moving along a fixed demand curve-so think
of supply increasing or decreasing, while the
Van demand curve is staying in the same place.
gaiv
a. If the elasticity of demand for college text-
books is -0.1 and the price of textbooks
increases by 20%, how much will the quantity
egnede demanded change, and in what direction?
b. In your answer to part a, was your answer in
to
percentages or in total number of textbooks?
c. If the elasticity of demand for spring break
1 packages to Cancun is -5, and if you notice
that this year in Cancun the quantity of
packages demanded increased by 10%, then
what happened to the price of Cancun vaca-
tion packages?
d. In your college town, real estate developers
are building thousands of new student-
friendly apartments close to campus. If you
ashwant to pay the lowest rent possible, should
you hope that demand for apartments is
relatively elastic or relatively inelastic?

Expert Solution

Step 1

Elasticity of demand measures the percentage change in quantity demanded due to some percentage change in the price of the good.

If the percentage change in quantity demanded is less than percentage change in price then demand is said to be inelastic.

If the percentage change in quantity demanded is more than percentage change in price then demand is said to be elastic.

If the percentage change in quantity demanded is same as percentage change in price then demand is said to be unit elastic.

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