If the demand curve for slices of pizza is given as Q = 300 - 16p, then the point elasticity of demand when price is $1.50 is (Hint dQ/dp = -16)
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If the demand curve for slices of pizza is given as Q = 300 - 16p, then the point
elasticity of demand when price is $1.50 is (Hint dQ/dp = -16)
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- Exercise 4.7 You own two massage parlours located in a big city, one of them in a central residential neighbourhood and the other on the outskirts. The price elasticity of the demand of the customers of the residential neighbourhood is, in absolute value, 1.25 and that of the clients who live on the outskirts is, in absolute value, 2.5. The marginal cost of a full massage is € 12 regardless of the location of the salon. a) If your goal is to get the maximum possible benefit, what price should you charge in each salon for a full massage? b) Use the Lerner index to determine the market power it holds in each of the segments.Suppose the demand for a product is given by - 8p + 173. D(p) A) Calculate the elasticity of demand at a price of $9. = Elasticity = (Round to three decimal places.) B) At what price do you have unit elasticity? (Round your answer to the nearest penny.) Price = $John Stain estimates that the demand curve for his PaneMaster insulated windows is given by Currently, John is charging $150 per window, including installation. John is considering a sale. Find the price elasticity of demand for PaneMaster Windows and comment on the advisability of a sale. a) n = -0.67 so the consequences of a sale cannot be determined b) n = -0.67, so a sale would increase profits c) n = -6.00, so the consequences of a sale cannot be determined d) n = -6.00, so a sale would increase profits Q 350- 2P
- The demand for scarves depends on the weather during winter. If it is a heavy winter, then the demand for scarves is QH (P) = 84 — 3P and if it is a light winter the demand for scarves is Q₁(P) = 85 - 4P. The supply of scarves is Qs(P) = 4P - 7. - a) Find the equilibrium price and quantity in each case. b) Calculate the elasticity of demand and the elasticity of supply when P = 10. Comment on your results. c) In separate graphs, draw the two cases and depict the consumer and producer surplus. Calculate the surpluses in all cases. d) The government wants to limit the production of scarves and sets a quota of 42 scarves. What is the effect of the quota in each case? In separate graphs, draw the effect of the quota. Calculate the effect of the quota on welfare (consumer surplus etc).A company's research team finds that the elasticity of demand for a particular item at price p is given by: E (p) = Compute the elasticity of demand at p = 15 and explain what should be done to 65-p increase revenue. The elasticity of demand atp = 15 is 0.3. This value indicates that the demand is inelastic, so a small increase in price will result in a small increase in revenue. Thus, the company should make a small increase the price. The elasticity of demand at p = 15 is (0.3. This value indicates that the demand is elastic, so a small increase in price will result in a small increase in revenue. Thus, the company should make a small increase the price. The elasticity of demand at p = 15 is 0.3. This value indicates that the demand is inelastic, so a small increase in price will result in a small decrease in revenue. Thus, the company should not increase the price. The elasticity of demand at p = 15 is 0.3. This value indicates that the demand is elastic, so a small increase in…Consider the following demand equation for a good:p =(200) / (q + a)^2 where a is a constant. (a) Find dq/dp . (b) Find the expression for elasticity, η, such that only q and a appear. (Hint: Use the original function for demand to get rid of p). (c) Find a. such that at q = 20 demand is unitary elastic. (d) Classify the demand at q < 20 and q > 20 as elastic and inelastic for the a value found in the previouspart. Explain what happens to revenue as price increases for both q < 20 and q > 20.
- Lara offers 100 autograph bats.If each is priced at p dollars,it is that the demand curve for the bast will be p=250−q. If price elasticily is 4 E(p)=dq÷dp. When |E(p)|<1, demand is inelastic and when q p |E(p)|>1,demand is elastic. (i) Find the price elasticity of demand for Lara′s bats. (ii) Is demand inelastic or elastic?Price elasticity of demand (PED): Determinants of price elasticity of demand Substitutes available Proportion of income spent on the good Luxury or necessity Addictive or not Time period to respondFind E( p) and determine if demand is elastic or inelastic (or neither) at the indicated price. q = 700 - 5p, p = 80
- Julie plans to start a pet-sitting service. She surveyed her neighborhood to determine the demand for this service. Assume that each person surveyed demands only one hour of pet sitting services per period. The table below shows a portion of her survey results.Suppose that as the price of Y falls from $3.00 to $2.80, the quantity of Y demanded increases from 200 to 210. Then the absolute value of the price elasticity (using the midpoint formula) is appraximately Multiple Choice 15 1.41 0.71 0.5Keep in mind the formula for elasticity of demand used in this course is E =- dp. Hint: Start off by solving for q in terms of p using a natural logarithm. Once you have an expression for q you can differentiate it with respect to p to get dq/dp. Plug your dq/dp into the formula for E, replace all the p's with 600e 0.29 and you've got your elasticity (it should simplify down nicely). You can maximize revenue by finding the quantity that gives you unit elasticity, i.e., E = 1. For the following demand function, find a. E, and b. the values of q (if any) at which total revenue is maximized. p= 600 e -0.2q a. Find the elasticity of demand (E) in terms of q. E(q) = b. Find the values of q (if any) at which total revenue maximized. Select the correct choice below, and if necessary, fill in the answer box within your choice. O A. Revenue is maximized at q= (Type an integer or a simplified fraction.) O B. No values of q maximize revenue.
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