Suppose that the price elasticity of demand for a packet of cigar is -0.85 and the price elasticity of supply is 1.5 at market equilibrium. As a result of an increase on sales tax, the new equilibrium price rises by 15%. (a) What is the percentage change in quantity demanded of cigar? Show your calculation. (b) Explain with a relevant diagram, what will happen to total revenue in the cigar industry? (c) With the use of an appropriate diagram, explain with the above information, who will bear most of the burden between consumers and producers of the sales tax?

Q: Which of the following is/are correct? (i) If price elasticity of demand = 0, total revenue is…

A: Option A ("Only (ii) and (iv) are correct") is the correct answer.Explanation:Let's break down the…

Q: (a) Define the price elasticity of demand and the income elasticity of demand. (b) Elaborate FOUR…

A: Price elasticity of demand is the measure of responsiveness of quantity demand of a good due to the…

Q: You are an economist for the City Subway Commission. Presently, the price of a subway ride is 80…

A: Total revenue is described as the manufactured from the charge and the quantity. It is the sales…

Q: QUESTION TWO X limited is a company producing two products A and B. The Marketing Manager has the…

A: In the study of economics, elasticity is used for measuring the changes in quantity demanded of a…

Q: Plot the demand curve from the demand schedule information provided. Price Quantity Demand (Qd) 1 9…

A: Hey, Thank you for the question. According to our policy we can only answer up to 3 sub parts per…

Q: 1. Which of the following would most likely cause equilibrium quantity and price of x to rise? (a) A…

A: The equilibrium occurs where the demand and supply are equal.

Q: Freihofer's bread is a normal good produced by the Freihofer Bakery. Using clearly labeled Demand…

A: Note: Since, you've posted question with multiple sub-parts, we will solve the first three sub-parts…

Q: $30 500 Over which price range is the elasticity of supply greater than 1?

A:

Q: The following is a demand schedule for shoes:    Price (Per Pair)                   $120 $100 $80…

A: Elasticity means the responsiveness of demand or supply to changes in price or other factors. When…

Q: 10. Which of the following statements is (are) correct? (x) In any market, total revenue is the…

A: TR(total revenue) is the product of P(price) and Q(quantity) of the product.

Q: Johnson & Johnson recently reduced the price of "Generic A" from $100 to $60 in New Jersey area…

A: In this question we are given that Johnson & Johnson has recently reduced the price of "Generic…

Q: Tutorial Exercise Worldwide annual sales of smartphones in over a 5 year period were projected to…

A: Meaning of Price Elasticity of Demand: The price elasticity of demand refers to the situation…

Q: 1. Price elasticity of demand      a. from a to b      b. from e to f

A: Alfred Marshal is the person who introduces the concept of elasticity into economics. The elasticity…

Q: Suppose a decrease in price from $10a to $5 causes an increase in Q D from 1003 to 120. Calculate…

A: Given  When the price is decreased from $10α to $5 then the quantity demanded increases from 100β to…

Q: A vegetable fiber is traded in the US, has the following domestic supply and demand for various…

A: Price elasticity of demand shows the change in quantity demanded due to change in price.  The demand…

Q: (Figure: Demand Curves) The figure shows four different demand curves for four products: A, B, C and…

A: The elasticity of demand measures the responsiveness of quantity demanded to changes in the price of…

Q: The first two questions will deal with the market for a particular type of pharmaceutical used to…

A: The elasticity of demand is the responsiveness of change in demand with the change in the price of…

Q: On the following graph of a demand curve, what is the price elasticity of demand at the point where…

A: Price elasticity of demand (PED) is a measure of how responsive the quantity demanded of a good or…

Q: Demand and Supply Schedule for Good X: Unit price of x Quantity demanded of x Quantity supplied…

A: We have to find demand and supply schedule for good x.

Q: Suppose a Palestinian company (Siniora Food Industries Company) sells 20,000 units when the price is…

A: A. Q1 = 20,000 units Q2 = 30,000 units Using mid-point method: Percentage change in quantity =…

Q: Is Starbucks’s coffee a normal or inferior good? (b) Due to an economic recession, consumers’…

A: The income elasticity of demand measures how the quantity demanded changes in response to a change…

Q: Price (€ per liter) 15 vertical intercept at 10 D A) 0 B) 400 C) 1,000 D) 1,600 D Refer to the…

A: A demand curve is a graphical representation in economics that shows the relationship between the…

Q: 2. Suppose Qd=10,000 -2 Px + 3 Px-4.5M, = where Px $100, P = $50, and M (income) = $2,000. (a) What…

A: Economic analysis in the context of both consumers and producers involve analyzing their respective…

Q: 2- The demand schedule of the product is given below Price $ (P) Quantity (Q) 100 1 90 2 80 3 70 4…

A: Elasticity of demand measures the degree of responsiveness. How much quantity demanded will change…

Q: PRICE (Dollars per unit) Z 350 + 225 175-L 50 0 Region Between Y and Z Between W and X Between X and…

A: Elasticity of demand is the percentage change in quantity demanded due to percentage change in…

Q: Price (dollars) 220 200 180- 160- 140- 120- 100- 80- 60- 40 20- Demand for GPS Units 240 Quantity…

A: Since you have posted a question with multiple subparts, we will provide the solution to only the…

Q: (a ) The price of a crate of drinks is $9 when the demand is 320 crates and the price per crate…

A: (a) Given the two price and demand combinations: Price Demand (crates) $9 320 $8.5 270…

Q: Demand and Supply Schedule for Good Y: Unit price of y Quantity demanded of y Quantity supplied…

A: Demand and Supply Schedule for Good Y was attached below with clear explanation

Q: Q4. (a) Suppose a decrease in price from $100 to $5 causes an increase in Q" from 1005 to 120.…

A: Answer a.  According to the question, it is given that : Old Price = $10 New Price = $5 Old Quantity…

Q: 6. Best Buy sells Q units of áat-screen TVs each year. Best Buy executives also know that the price…

A: Total revenue for a firm is the amount of money earned from its sales to the consumers. It is…

Q: img' (a If po increases, what happens to the demand and supply of public transportation (shifts…

A: Cross-price elasticity of demand (XED) is a measure of the responsiveness of the quantity demanded…

Q: Q4. (a) Suppose a decrease in price from $100 to $5 causes an increase in Q from 1008 to 120.…

A: Given  At price P1 = 10α quantity demanded Q1= 100β At price P2 =$5, quantity demanded Q2 =120 We…

Q: 2. (a): On friday, the price and quantity demanded for petroleum product were $112 and 150,000…

A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…

Q: Question Suppose that business travelers and vacationers have the following demand for airline…

A: Price ($) Quantity Demanded (business travelers)  Quantity Demanded (vacationers) 150 2100…

Q: 3. The demand equation is given by 36,000,000 (24 + 500)2 (a) How fast is revenue changing with…

A: The demand equation gives the relationship between price and quantity demanded. The demand curve is…

Q: 3. The following table gives the supply schedule for Purcell Ltd, a UK based rug producer. Price (£)…

A: Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Q: a Slurpico Department of Energy. Prices are in dollars and sales are in gallons per day and driven…

A: Since you have posted a question with multiple subparts, we will solve the first three sub-parts for…

Q: The demand for good X is described by Qx = m – 2 In (Px), where Qx is the number of good X demanded,…

A: The elasticity of demand is given by eD=dQxdPxPxQx=-2PxPxQx=-2Qx The absolute value is given by 2Qx.…