R.C. Willey's economists report that the quantity demanded for their microfiber sofas is given by the equation below. Px is their own price, C and D are other expensive good sold in the store with prices Pc and PD, M is income, and A is advertising expense. QXD=5009 -6.7PX-4Pc+1.9Pp+0.021M+0.67A What is the cross price elasticity of demand between X and D when Px=456, Pc=480, PD=579.8, M=40289, A=2644? (give me at least three decimal places) Answer: Check

R.C. Willey's economists report that the quantity demanded for their microfiber sofas is given by the equation below. Px is their own price, C and D are other expensive good sold in the store with prices Pc and PD, M is income, and A is advertising expense. QXD=5009 -6.7PX-4Pc+1.9Pp+0.021M+0.67A What is the cross price elasticity of demand between X and D when Px=456, Pc=480, PD=579.8, M=40289, A=2644? (give me at least three decimal places) Answer: Check

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter5: Price Elasticity Of Demand And Supply

Section: Chapter Questions

Problem 18SQ

See similar textbooks

Similar questions

The Stopdecay Company sells an electric toothbrush for $25. Its sales have averaged 8,000 units per month over the past year. Recently, its closest competitor, Decayfigh ter, reduced the price of its electric toothbrush from $35 to $30. As a result, Stopde cays sales declined by 1,500 units per month. What is the arc cross elasticity of demand between Stopdecays toothbrush and Decayfighters toothbrush? What does this indicate about the relationship between the two products? If Stopdecay knows that the arc price elasticity of demand for its toothbrush is 1.5, what price would Stopdecay have to charge to sell the same number of units as it did before the Decayfighter price cut? Assume that Decayfighter holds the price of its toothbrush constant at $30. What is Stopdecays average monthly total revenue from the sale of electric toothbrushes before and after the price change determined in part (b)? Is the result in part (c) necessarily desirable? What other factors would have to be taken into consideration?
Charles loves Mello Yello and will spend 10 per week on the product no matter what the price. What is his price elasticity of demand for Mello Yello?
Suppose Erin, the owner-manager of a local hotel projects the following demand for her rooms: a. Calculate the price elasticity of demand between 90 and 110. b. Is the price elasticity of demand between 90 and 110 elastic, unit elastic, or inelastic? c. Will Erins total revenue rise if she increases the price from 90 to 110? d. Calculate the price elasticity of demand between 110 and 130. e. Is the price elasticity of demand between 110 and 130 elastic, unit elastic, or inelastic? f. Will Erins total revenue rise if she increases the price from 110 to 130?
Evaluate the following statement: Along a downward-sloping linear demand curve, the slope and therefore the elasticity of demand are both 'constant.
Suppose Sally buys exactly five bars of English toffee each week, regardless of whether the toffee bars are regularly priced at 1 or on sale for 0.50. Based on this information, what is Sallys price elasticity of demand for English toffee in this price range? a. 0 b. 1 c. Infinity d. Cannot be determined.
If bus travel is an inferior good, its income elasticity of demand is a. strictly greater than 1. b. positive. c. equal to zero. d. negative.
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.
Prove that price elasticity of demand is not the same as the slope of a demand curve.
If automobiles and gasoline are complements, then their cross-elasticity coefficient is a. strictly greater than 1. b. positive. c. equal to zero. d. negative.
If the midpoint on a straight-line demand curve is at a price of $7, what can we say about the elasticity of demand for a price change from $12 to $10? What about from $6 to $4?
According to the previous discussion, what factors influence the price elasticity of demand for cigarettes? What other factors not mentioned in the article might influence the price elasticity of demand for cigarettes?
(Calculating Price Elasticity of Demand) Suppose that 50 units of a good are demanded at a price of Si per unit. A reduction in price to $0.20 results in an increase in quantity demanded to 70 units. Using the midpoint formula, show that these data yield a price elasticity of 0.25. By what percentage would a 10 percent rise in the price reduce the quantity demanded, assuming price elasticity remains constant along the demand curve?