Homewörk: 2) Problem / Due Friday, September 25: The New York Times reported... That subway ridership declined by five (5) million fewer riders in December, 1995, the first full month after the price of the token increased $.75 to $2.00 (+60%) than in the previous December. This resulted in a 20 % decline in riders. Regarding output, supply increased by 15 %; > With the information above ===> estimate the Price elasticity of Demand (PED) for subway rides; What about the Price elasticity of Supply ? (PES) > According to your analysis, what happens to the Transit Authority's total revenue when the fåre rises? Explain ? > Why might your initial elasticity (PED) and (PES) calculations be unreliable?

Homewörk: 2) Problem / Due Friday, September 25: The New York Times reported... That subway ridership declined by five (5) million fewer riders in December, 1995, the first full month after the price of the token increased $.75 to $2.00 (+60%) than in the previous December. This resulted in a 20 % decline in riders. Regarding output, supply increased by 15 %; > With the information above ===> estimate the Price elasticity of Demand (PED) for subway rides; What about the Price elasticity of Supply ? (PES) > According to your analysis, what happens to the Transit Authority's total revenue when the fåre rises? Explain ? > Why might your initial elasticity (PED) and (PES) calculations be unreliable?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: 1. Determinants of the price elasticity of demand Consider some determinants of the price elasticity…

A: Ed(elasticity of demand) is the ratio of %change in Qd(quantity demanded) and %change in P(price).…

Q: Assuming normally shaped demand and supply curves, which of the following events would possibly…

A: Equilibrium in the market of goods and services occurs at the intersection of demand and supply…

Q: asured in packs sold per hour: 2, = 7,000 – 200P 2, = 1,000 + 600P Demand: Supply: Determine the…

Q: uestion 12 on of the price of cranberries, pe, and the price of apples, pa- Suppose that the…

A: (a) Qdc = 1600 - 12Pc + 4Pa Where Qdc is worldwide demand of cranberries Pc is price of cranberries…

Q: 2. Winston is disappointed in the new SUV he recently purchased. He was excited about the new…

A: Market equilibrium: At the market equilibrium we have demand equals to supply. Or at market…

Q: he supply and demand for the market for gasoline is shown below where quantity is measured in…

A: We will solve the first three subparts only. Please resubmit the other part separately in case you…

Q: 4. Why would we see a decrease in demand for certain goods if incomes are rising in an economy?…

A: Correct : some goods are inferior goods and consumers substitute normal goods for them when incomes…

Q: Hi! I need some help with this. I'm not for sure where to even start... thank you.

Q: Consider the following scenario: “Corn is mostly grown in the Great Plains region of the United…

A: The measure that depicts the level where the demand for a good is equal to the supply of a good…

Q: 1. Given the estimated market demand and supply functions for coffee as: Qxd= 85.6 –10Px –3Ps +Y and…

A: Price is determined through market mechanism. Demand and supply are the function which help to…

Q: Consider the market for minivans. For each of the following events, identify which of the…

A: Demand curve The demand curve displays the amounts of a specific commodity or service that…

Q: Suppose that the inverse demand curve for a product is given by: P = 100 -Q°. +. 2M, where M is the…

A: Given: Inverse demand function: Inverse supply function:

Q: Online the timing and tailoring of prices to specific products is the key to successful pricing in…

A: Elastic demand is the state in which demand adjusts in response to a small change in price. Price…

Q: 4. Consider the following price-demand equation for a product, assuming price and demand are both…

A: A demand equation in the form Qd = a-bP states how the price (P) of a good determines the quantity…

Q: What Happens When... ? Directions: For each scenario, determine if there will be an increase or…

A: "Since you have asked multiple questions, we will solve first question for you .. If you want any…

Q: Which of the following scenarios would definitely cause the price of good or service to decrease?…

A: The demand and supply for a good is the primary factor in considering price of the good.

Q: What is the conclusion of these changes (can you say for certainty what direction to equilibrium…

A: Equilibrium price and quantity occurs at the point where the quantity demanded by consumers equals…

Q: 180 80 90 QUANTITY (Units) For each of the regions, use the midpoint method to identify whether the…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Suppose the Mayo publishes a study finding that the caffeine in coffee increases the probability of…

A: Change in demand and supply occurs due to change in factors other than price. An increase in demand…

Q: Equilibrium Point Yaster Cookware is planning to introduce a new line of cast-iron pans. A marketing…

A: The price and demand have an inverse relation as per by the law of demand. Thus as the price…

Q: From the graph it is clear that the demand for gasoline is relatively unit elastic + and the supply…

A: Gasoline is a somewhat inelastic item, which means changes in costs have little impact on request.…

Q: Q = 100 – 2 P + 7 Py,“ || here Pr = £20, where P, = £20 is the price of another product- a)…

A: Elasticity of demand depicts how much consumer responds with the change in price.

Question

Homewörk:
2) Problem / Due Friday, September 25:
The New York Times reported...
That subway ridership declined by five (5) million fewer riders in December, 1995, the first full month after the price of the token increased $.75 to
$2.00 (+60%) than in the previous December.
This resulted in a 20 % decline in riders. Regarding output, supply increased by 15 %;
> With the information above ===> estimate the Price elasticity of Demand (PED) for subway rides; What about the Price elasticity of Supply ?
(PES)
> According to your analysis, what happens to the Transit Authority's total revenue when the fåre rises? Explain ?
> Why might your initial elasticity (PED) and (PES) calculations be unreliable?

Expert Solution

This question has been solved!

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

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Concept

VIEW

Solution: Problem 2

VIEW

Note:

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 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

Suppose the demand and supply for Xbox-One are: Qd = 500 - 2P, Qs = -100 + 4P . Assume that consumers demand 75 less Xbox units at each price. Also, a new tax has been imposed on foreign microchips, increasing the costs of production, and reducing supply by 35 units at each price Given this information find: a. CS0 = $ b. CS2 = $ c. PS2 = $
13. How shifts in demand and supply affect equilibrium Consider the market for pens. Suppose that the number of students who are allergic to the rubber used in pencil erasers increases, leading more students to switch from pencils to pens in school. Further, the price of plastic, a major input in the pen production process, has dropped sharply. On the following graph, labeled Scenario 1, indicate the effect these two events have on the demand for and supply of pens. Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps back to its original position, just drag it a little farther. PRICE (Dollars per pen) 10 PRICE (Dollars per pen) 9 8 1 0 10 9 8 1 0 0 1 0 2 1 Next, complete the following graph, labeled Scenario 2, by shifting the supply and demand curves in the same way that you did on the Scenario 1 graph. 2 Scenario 1 Supply 3 5 6 7 QUANTITY (Millions of pens) 3 Demand Scenario 2 8 Supply 4 5…
Can you help me with questions A, B, C,D, and E thank you!!
. Determinants of the price elasticity of demand Consider some determinants of the price elasticity of demand: • The availability of close substitutes • Whether the good is a necessity or a luxury • How broadly you define the market • The time horizon being considered A good without any close substitutes is likely to have relatively...........................( elastic/inelastic) demand, since consumers cannot easily switch to a substitute good if the price of the good rises. A good’s price elasticity of demand depends in part on how necessary it is relative to other goods. If the following goods are priced approximately the same, which one has the least elastic demand?(multiple choice) a) Sports car b) A heart valve for heart attack victims The price elasticity of demand for a good also depends on how you define the good. Organize the goods found in the following table by indicating which is likely to have the most elastic…
Please provide steps by step answer with proper explanation with final answer
The New York Times reported… > Subway ridership declined by five (5) million fewer riders in December, 1995, the first full month after the price of the token increased by $.75 to $2.00 (+ 60%) than in the previous December. This resulted in a 15 % decline in riders. Also, given the price increase ($1.25 to $2.00 or + $ .75), supply did not change ! > With this information, estimate the Price Elasticity of Demand ("PED") and Price Elasticity of Supply ("PES") for subway rides; > According to your analysis, what happens to the Transit Authority’s total revenue when the fare rises? Explain ? > Why might your initial elasticity ("PED") calculation be unreliable? > If your explicit total cost is $50 M (accounting costs) and $60 M economic costs, based on the token increase, are you now generating enough revenue to cover your operating costs? > What is the Profit / Loss turnaround ? Interpret your results.. * Hint: Formulas to use are TR – TC = Profit; *…
Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
I need help with question 7 and 8.
Use the information/statement below to answer questions: 10. Because of exceptionally good weather conditions, this year's supply of-eucumber in Batinah is 20% greater than last year's supply. Assume that once cucumber is grown, the supply curve for cucumber is perfectly inelastic. Also assume that the demand curve for cucumber is the same this year as it was last year. If the price of cucumber is 25% lower this year than it was last year, what can we conclude? 10. The price elasticity of demand for cucumber is: a. -1.25 b. -1.00 © - 0.80 d. -0.25
13. How shifts in demand and supply affect equilibrium Consider the market for pens. Suppose that new medical concerns regarding graphite absorption have put pressure on schools to reduce pencil use in favor of pens. Further, the price of ink, a major input in the pen production process, has increased sharply. On the following graph, labeled Scenario 1, indicate the effect these two events have on the demand for and supply of pens. Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps back to its original position, just drag it a little farther. PRCE (Dolars per pen) 1 2 Scenario 1 Demand 3 5 0 7 QUANTITY (Millions of pens) Demand 16 Supply Next, complete the following graph, labeled Scenario 2, by shifting the supply and demand curves in the same way that you did on the Scenario 1 graph.
What values should I plug in for the P, the QD, and the QS values in these equations for elasticity of demand and supply? The demand and supply equations are: QD=15-10P QS=40P-50