Price elasticity of demand If the price elasticity of demand for a product measures 0.45, then: Select the correct answer A this good has many available substitutes. B) this good must be a non-essential good. C) this good is a high-priced good. D) a decrease in price will increase total revenue. E this good is demand price inelastic.

Price elasticity of demand If the price elasticity of demand for a product measures 0.45, then: Select the correct answer A this good has many available substitutes. B) this good must be a non-essential good. C) this good is a high-priced good. D) a decrease in price will increase total revenue. E this good is demand price inelastic.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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To say there is an elastic demand for a product means that O consumers are not very responsive to a change in the price of the product. there are relatively few substitutes, few competitors, and a short time period under consideration. O there is a positive relationship between price and total revenue. O consumers are very responsive to a change in the price of the product.
6. Economics Partners, a consulting firm, estimates the elasticity of ice cream cones to be 1.9. A. If the price of ice cream cones increases by 5 percent, what is expected to happen to the quantity of ice cream cones demanded? B. Given the elasticity estimate of 1.9, is it most likely that the elasticity of demand for Dairy Queen ice cream cones is 1.5, 1.9, or 2.5? Explain.
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Explain in your own words what information the income elasticity of demand provides. If a good is an inferior good, what will the sign of the income elasticity of demand be? Explain.
Apple sells 6.5 million AirPods at $149 each. Apple reduces the price to $120 and unit sales volume increases to 8.45 million. Calculate the product’s elasticity of demand then classify it as inelastic or elastic..
1. If a decrease in income results in a decrease in quantity demanded of a good, then for that good the: cross-price elasticity of demand is negative. price elasticity of demand is negative. income elasticity of demand is negative. income elasticity of demand is positive.
The demand for orange at price $10 is 100 and at price the $8 the demand is 150. Find the elasticity of demand.
Q2
Which of the following statement is correct about the price elasticity of car and the price elasticity of ice creama. The price elasticity of car is lower than the price elasticity of ice cream.b. The price elasticity of car is greater than the price elasticity of ice cream. c. There is not any relation between the price elasticity of car and the price elasticity of ice cream.d. All answers are wrong
The accompanying table lists the cross-price elasticities of demand for several goods, where the percent quantity change is measured for the first good of the pair, and the percent price change is measured for the second good. ( please see image) a. Explain the sign of each of the cross-price elasticities. What does it imply about the relationship between the two goods in question? b. Compare the absolute values of the cross-price elasticities and explain their magnitudes. For example, why is the cross-price elasticity of McDonald’s burgers and Burger King burgers less than the cross-price elasticity of butter and margarine? c. Use the information in the table to calculate how a 10% increase in the price of Pepsi affects the quantity of Coke demanded. d. Use the information in the table to calculate how a 5% decrease in the price of gasoline affects the quantity of SUVs demanded.
Suppose the own price elasticity of demand for good X is -2, its income elasticity is -1, its advertising elasticity is 2, and the cross- price elasticity of demand between it and good Yis-3. Determine how much the consumption of this good will change it Instructions: Enter your responses as percentages. If you are entering a negative number, be sure to use a (-) sign. a. The price of good X decreases by 4 percent. percent b. The price of good Y increases by 10 percent. percent c. Advertising decreases by 3 percent. percent d. Income increases by 2 percent. percent