Q3. For a linear demand curve q(p)-20-2p. (1) calculate the price elasticity at p-0, 2, 5, 8, 10; (ii) calculate 4R/4p andverify that 4R <0 if lel>1 and if p rises; (iii) calculate MR to show that MR> 0 if lel>1. What is the difference between ARAPand MRIQ4. For the C-D UF: xx/x*, calculate the income elasticity d, for each good. Does your result satisfy the condition thatS181+52021? Note that s. is the expenditure share for good i.

Answer; Answer 3 I)q=20-2p ∆q/∆p=-2 Elasticity formula=(p/q)(∆q)/∆p) Elasticity=(p/q)(-2) p…

Q3. For a linear demand curve q(p)-20-2p. (1) calculate the price elasticity at p-0, 2, 5, 8, 10; (ii) calculate 4R/4p and verify that 4R <0 if lel>1 and if p rises; (iii) calculate MR to show that MR> 0 if lel>1. What is the difference between 4R/Ap and MR?

Q3. For a linear demand curve q(p)-20-2p. (1) calculate the price elasticity at p-0, 2, 5, 8, 10; (ii) calculate 4R/4p and verify that 4R <0 if lel>1 and if p rises; (iii) calculate MR to show that MR> 0 if lel>1. What is the difference between 4R/Ap and MR?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Q3. For a linear demand curve q(p)-20-2p. (1) calculate the price elasticity at p-0, 2, 5, 8, 10; (ii) calculate 4R/4p and
verify that 4R <0 if lel>1 and if p rises; (iii) calculate MR to show that MR> 0 if lel>1. What is the difference between ARAP
and MRI
Q4. For the C-D UF: xx/x*, calculate the income elasticity d, for each good. Does your result satisfy the condition that
S181+52021? Note that s. is the expenditure share for good i.

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