Suppose that your demand schedule for DVDs is as follows:Quantity DemandedPriceQuantity Demanded(income-$10 000)(income $12 000)$84050$104532$122430$141620$16812Use the midpoint method to calculate your price elasticity of demand as the price of DVDSincreases from $8 to $10 if () your income is $10 000, and () your income is $12 0004Calculate your income elasticity of demand as your income increases from $10 000 to $12 000it the price is $12In relation to question b, is DVDa normal good or an inferior good. Why?

Part a) subpart i) Price Elasticity of Demand using mid-point formula:

Answered: Suppose that your demand schedule for…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose that for your demand schedule for pizza is as follows:a)Use the midpoint method to calculate your price elasticity of demand as the price of pizza increases from$8 to $10 if(i)your income is $20,000(ii)your income is $24,000.b)Calculate your income elasticity of demand as your income increases from$20,000 to$24,000(i)the price is $12 and (ii) the price is $16
Consider the following demand schedule for movie tickets. Suppose the price of a movie ticket falls from $9 to $7. Calculate the price of elasticity of demand and identify the type of elasticity.
Back to Assignment Keep the Highest 1/2 4. Elastic, inelastic, and unit-elastic demand The following graph shows the demand for a good. Attempts 1 ❖ PRICE (Dollars per unit) 350 225 175 50 0 Region Between W and X Between X and Y Between Y and Z 1 QUANTITY (Units) True False W Demand For each of the regions listed in the following table, use the midpoint method to identify if the demand for this good is elastic, (approximately) unit elastic, or inelastic. Elastic Inelastic Unit Elastic ? True or False: The slope of the demand curve is not equal to the value of the price elasticity of demand.
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 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.
Calculate the Elasticity Coefficient for the following scenario. Patty bakes pies, she sells them for $10 each and sells about 55 pies per week. But the price of her ingredients increased so she' s contemplating a price increase. She will raise the price to $12 and she estimates her demand will fall to 50 pies per week. Calculate the elasticity coefficient for Patty's Pies. Are Patty's Pies elastic or inelastic? Should she raise her prices? Or keep them the same? You should be able to show your work.
A rise in the price of a muffin from $2 to $3 results in a fall in the quantity demanded of muffins from 200 million to 160 million a day. Moreover, at today's price of a donut of $1.50, the quantity demanded of donuts increases from 70 million to 100 million a day. Calculate the price elasticity of demand for muffins (show calculations) Is the demand for muffins elastic or inelastic? Calculate the cross elasticity of demand for donuts with respect to the price of a muffin. (show calculations) Based on the above calculation how would you characterize the relationship between muffins and donuts? Why would the business owner want to know this? Only typed solution
Using the midpoint formula and the graph below, calculate the following:i. The price elasticity of demand when the price changes from 9 to 15; andii. The price elasticity of supply when the price changes from $4 to $9
Discuss how the demand elasticity of a product changes? Give examples.
The following table contains a monthly demand and supply schedule for large, single- topping, carry-out pizza Pizza Price (per pack) Quantity demanded for pizza (per pack) Quantity supplied for pizza (per pack) Quantity demanded for good Y $21 6000 7900 6000 $19 7000 7200 8000 $17 8000 6500 10000 (A) Calculate the price elasticity Of demand (PED) for good X when price fall from S 19 to $ 17. (B) Suppose you are the sellers of pizza based on the value of PED obtained In your answer for Question(A), would you or would you not raise the price of pizza? Why? (C)What S the cross elasbcity of demand (CED) of Good Y when price of carry-out pizza fall from $19 to S17? How is pizza and the Good Y related?
If price decreases from 20 $ to 12 $, what will be the magnitude of price elasticity of demand? Calculate showing formula, figures and arithmetic operations. Use simple notation. Example: (8+2)/2=5. *
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