Suppose the price of cauliflower increases by 16.53%. If consumers buy 3.28% less cauliflower after the price increase, the total revenue for cauliflower producers will because the effect is greater than the effect. oooo increase; price; quantity decrease; quantity; price not change; quantity; price increase; quantity; price
Suppose the price of cauliflower increases by 16.53%. If consumers buy 3.28% less cauliflower after the price increase, the total revenue for cauliflower producers will because the effect is greater than the effect. oooo increase; price; quantity decrease; quantity; price not change; quantity; price increase; quantity; price
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Suppose the price of cauliflower increases by 16.53%. If consumers buy 3.28% less cauliflower after the price increase, the total revenue for cauliflower producers will _______ because the _______ effect is greater than the _______ effect.
- ○ increase; price; quantity
- ○ decrease; quantity; price
- ○ not change; quantity; price
- ○ increase; quantity; price
This exercise involves understanding the relationship between price changes, demand, and total revenue, focusing on how a significant change in price can outweigh changes in quantity demanded.
![## Demand Function Problem
Suppose the demand function for flashlights is expressed as \( Q = 100 - 4p \). If a flashlight currently sells for $10, then the point price elasticity of demand equals:
- ○ -4
- ○ -2.5
- ○ -0.67
- ○ -1.5
### Explanation
In this problem, you are given a linear demand function \( Q = 100 - 4p \) and asked to determine the point price elasticity of demand at a specific price point, \( p = \$10 \).
The price elasticity of demand (Ed) at a given point can be calculated using the formula:
\[ Ed = \frac{dQ}{dP} \times \frac{P}{Q} \]
Where:
- \( \frac{dQ}{dP} \) is the derivative of the demand function with respect to price \( p \).
- \( P \) is the price level.
- \( Q \) is the quantity demanded at that price level.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F7e2bbf39-064f-45a2-b5d6-7e2858aa5afb%2Fee2c2aa1-d14c-4ca2-9a34-40a53841e114%2Fg13v4op_processed.png&w=3840&q=75)
Transcribed Image Text:## Demand Function Problem
Suppose the demand function for flashlights is expressed as \( Q = 100 - 4p \). If a flashlight currently sells for $10, then the point price elasticity of demand equals:
- ○ -4
- ○ -2.5
- ○ -0.67
- ○ -1.5
### Explanation
In this problem, you are given a linear demand function \( Q = 100 - 4p \) and asked to determine the point price elasticity of demand at a specific price point, \( p = \$10 \).
The price elasticity of demand (Ed) at a given point can be calculated using the formula:
\[ Ed = \frac{dQ}{dP} \times \frac{P}{Q} \]
Where:
- \( \frac{dQ}{dP} \) is the derivative of the demand function with respect to price \( p \).
- \( P \) is the price level.
- \( Q \) is the quantity demanded at that price level.
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