Answered: MICROECONOMICS In a given market the…

MICROECONOMICS In a given market the demand curve is the following: D(p) = 277 - 4p. Determine the price elasticity of demand at the given price: p = 8. Use 2 decimals

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

For the demand function D(p),complete the following. D(p) = 90 − 3p (a)Find the elasticity of demand E(p) =
The price elasticity of supply for basmati rice (an aromatic strain of rice) is likely to be which of the following? multiple choice Higher in the long run than the short run, because farmers cannot easily change their decisions about how much basmati rice to plant once the current crop has been planted. Low in both the long and short runs, because rice farming requires only unskilled labor. High in both the long run and the short run, because the inputs required to produce basmati rice can easily be duplicated. High, because consumers have a lot of other kinds of rice and other staple foods to choose from.
Suppose the demand for a product is given by QD=100-5P, where QD is quantity per year measured in kilogram and P is the price in AUD per kilogram. The supply curve for this product is given by QS=4P-8. Calculate the elasticity of demand and supply at the equilibrium price.
Suppose the demand curve for a product is given by Q=14-1P+2P s where P is the price of the product and Ps is the price of a substitute good. The price of the substitute good is $2.20. Suppose P = $0.90. The price elasticity of demand is . (Enter your response rounded to two decimal places.)
What is the formula for measuring the price elasticity of supply? Es = (Click to select)percentage change in quantity supplied / percentage change in pricepercentage change in quantity demanded / percentage change in incomepercentage change in quantity demanded / percentage change in price Suppose the price of apples goes up from $20 to $23 a box. In direct response, Goldsboro Farms supplies 1300 boxes of apples instead of 1200 boxes. Compute the coefficient of price elasticity (midpoints approach) for Goldsboro’s supply. Instructions: Round your answer to two decimal places. Es = Is its supply elastic, or is it inelastic? Supply is (Click to select)elasticinelastic.
A product costs $13. When the price increases by $4, the quantity demanded decreases by 20 units. Assuming that the price elasticity of demand is unitary when the price equals $13, calculate the corresponding quantity demanded. If the price has increased from $13 to $17, and the quantity demanded decreased by 20 units, calculate the percentage change in price:
The price elasticity of demand can be found by: comparing the percentage change in quantity demanded to the percentage change in price. measuring absolute changes in price and quantity demanded. knowing that when price changes, quantity demanded goes in the opposite direction. examining only the slope of the demand curve.
You may have noticed that the market demand curve is always flatter than any individual demand curve. Is the market price elasticity of demand also always lower than the individual price elasticity of demand? The market price elasticity is not always lower because elasticity does not just depend on the slope but also the level of quantity demanded. The latter may be quite small for an individual. is always lower because the percentage change in price for the individual is larger than that for the market as a whole. is not always lower because the percentage change in price for the individual is smaller than that for the market as a whole. O is always lower because the slope of the market demand curve is flatter than any of the individual demand curves that compose it.
You are an economist for the City Subway Commission. Presently, the price of a subway ride is 80 cents, and 250000 seats are filled weekly. The price elasticity of demand for subway rides is -0.40, and the income elasticity of demand is -0.60. (A) If a recession lowered area incomes by 5%, how many additional seats per week would the subway need?
Your economist friend told you that because of the change in demand described in part (c), price elasticity of demand changed. Is your friend right? Explain.
QUESTION TWo. Suppose the Daily Graphic Newspaper estimates that if it raises the price of its newspaper from Ghc1.00 to Ghc1.50 then the number of subscribers will fall from 50,000 to 40,000. a. What is the price elasticity of demand for the Daily Newspaper when elasticity is calculated using the midpoint method? b. What is the advantage of using the midpoint method? c. If the Daily Newspaper's only concern is to maximize total revenue, should it raise the price of a newspaper from Ghc1.00 to Ghc1.50? Why or why not? d. Suppose there is an increase in consumers' incomes. In the market for automobiles (a normal good), does this event cause an increase in demand or an increase in quantity demanded? Does this cause an increase in supply or an increase in quantity supplied? (Explain. NB: Explanation must not be more than half a page.) e. Suppose there is an advance in the technology employed to produce automobiles. In the market for automobiles, does this event cause an increase in supply…
The first change in price for a good was from $21 to $24. Suppose the price changes by the same amount at each point of the supply curve. Calculate the percentage change in quantity at the second point using the midpoint method if there is constant unitary elasticity of the supply curve.