P₁ P₂ 4. The above diagram shows two product demand curves. On the basis of this diagram we can say that: A. over range P₁ P₂price elasticity of demand is greater for Dithan for D₂. B. over range P₁ P₂price elasticity of demand is greater for D-than for D₁- C. over range P₁P₂price elasticity is the same for the two demand curves. D. not enough information is given to compare price elasticities.
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- The price elasticity of the demand for gasoline is -0.02. The price elasticity of demand for gasoline at Joe’s 66 station is -1.2. Explain what might account for the different elasticities.a. Define income elasticity of demand and cross-price elasticity of demand. b. If a firm determines that the income elasticity of demand for its good is negative (EY < 0), what can be said about this good? c. On the island of Econopia, the cross-price elasticity of demand between holilacs and bajwins is negative (EXY <0). What is the relationship between these goods?9) For the demand funciton given, find the following. (a) The elasticity (b) The elasticity at the given price and is it elastic or inelastic. 10) For the demand funciton given, find the following. (a) The elasticity (b) The elasticity at the given price and is it elastic or inelastic. (c) The value(s) of x for which total revenue is a maximum (assume that x is in dollars) (c) The value(s) of x for which total revenue is a maximum (assume that x is in dollars) 3000 q = V300 – x; x= 250 X = 60
- 1. Suppose you are given the following information about the demand for vinyl records: P = 60 – 1.5QD a) Suppose the price increases from $15 to $30, what is the arc elasticity of demand? b) Suppose the price decreases from $30 to $ 15, what is the arc elasticity of demand? c) How does you answer from part (a) and (b) compare with the point elasticity of demand when price is $15? What about when price is $30?1) Walkers’ Shoes reports the following demand schedule for its black brogues.Price 1600 800 400 200 100 50 25 12.5Quantity demanded 2 4 8 16 32 64 128 256a) For an increase in price from 50 to 100, calculate:i) The proportional change in price.ii) The proportional change in quantity demanded.iii) The price elasticity of demand for Walkers’ black brogues.b) Considering the demand schedule in the table, what do you conclude about the value of the price elasticity of demand for Walkers’ black brogues at every level of output? How would you classify the demand for such a good?c) What is the effect on Walkers Shoes’ total revenue of doubling the quantity of shoes which it supplies? What is the value of its marginal revenue? How does your answer relate to the value of the price elasticity of demand?d) The income elasticity of demand for Walkers’ Shoes is estimated to be 1.8. By how what percentage do you expect demand to increase if its customers’ incomes increase from 31,500 to 38,500?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
- Calculate the price elasticity of demand for mobiletelephones where the quantity sold decreases from 225 to180 when the price rises from BD50 to BD57.5 3) With the help of a diagram, analyse the impact of entry ofnew suppliers into an industry on the demand and supplycurves. Make sure that your diagram is labelled clearly.iv. In the long run, new sedan models are produced. b. Jordan usually pays a price between $14 and $20 per kilogram of sugar. His monthly total expenditure on sugar increases as the price decreases. What does this imply about her price elasticity of demand for sugar?1. Consider the demand function for bicycles in South Florida: Q = 24 + 3Y – 1.2P where: Q is quantity demanded, Y is monthly income, and P is the price per unit. If/when P = $54, and Y = $2,300, (a) Find the quantity of bicycles that would be sold. (b) Calculate the amount of the seller's total revenue. (c) Compute the price-elasticity of demand (Ep) for bicycles. (d) Interpret your result in (c). (e) Compute the income-elasticity of demand (Ey) for bicycles. (f) Interpret your result in (e).
- Explain how the demand curves for normal productsand to, prestige products differ. What are demandshifts and why are they important to marketetS? Howdo firms go about estimating demand? How can marketetS estimate the elasticity of demand?Joe's Pig Palace sells barbecue plates for $4.50 each, and serves an average of 525 customers per week. During a recent promotion, Joe cut his price to $3.50 and observed an increase in sales to 600 plates per week. a. Calculate Joe's arc price elasticity of demand. b. Joe is considering permanently lowering his price to $4.00 to increase revenue. How many plates should Joe expect to sell at the new price? Does the move make sense in the light of Joe's desire to increase revenue?1. Identify and explain the type of price elasticity for the demand of Starbucks coffee with the aid of a diagram. 2. "Starbucks is measured on luxurious good both high quality and price". With reference to the text above and the concept of income elasticity, draw a diagram and explain what would happen to the demand for Starbucks coffee as income increases. 3. With the aid of a diagram, identify and explain the determinants of supply that would result in an increase and decrease in supply of Starbucks coffee.