Round up the answers to the nearest hundredths. Suppose that business travelers and vacationers have the following demand for airline tickets from Japan to Philippines. Price in (US Dollars $) Quantity Demanded for Tickets (Business Travelers) Quantity Demanded for Tickets (Vacationers) 150 2,100 1,000 200 2,000 800 250 1,900 600 300 1,800 400 a. As the price of tickets rises from $200 to $250, what is the price elasticityof demand for: (i) business travelers? (ii) vacationers? (Use the midpoint method in your calculations.) b. Why might vacationers have a different elasticity from business travelers? 2. The price of milk increases from $2.85 per gallon to $3.15 per gallon and the quantity supplied rises from 9,000 to 11,000 gallons per month. a. Solve for the percentage changes in price and quantity supplied. Solve for the price elasticity of supply. b. Determine whether it is price elastic, inelastic, or unit elastic.
Round up the answers to the nearest hundredths.
Suppose that business travelers and vacationers have the following demand for airline
tickets from Japan to Philippines.
|
Price in (US Dollars $) |
Quantity Demanded for Tickets (Business Travelers) |
Quantity Demanded for Tickets (Vacationers) |
|
150 |
2,100 |
1,000 |
|
200 |
2,000 |
800 |
|
250 |
1,900 |
600 |
|
300 |
1,800 |
400 |
a. As the price of tickets rises from $200 to $250, what is the price elasticityof
demand for:
(i) business travelers?
(ii) vacationers? (Use the midpoint method in your calculations.)
b. Why might vacationers have a different elasticity from business travelers?
2. The price of milk increases from $2.85 per gallon to $3.15 per gallon and the quantity
supplied rises from 9,000 to 11,000 gallons per month.
a. Solve for the percentage changes in price and quantity supplied. Solve for
the price elasticity of supply.
b. Determine whether it is price elastic, inelastic, or unit elastic.
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