The demand function for a soda is Q=20-2P , where Q stands for quantity and P for price. a)Calculate point elasticities at prices of 5 and 9. Is the demand curve elastic or inelastic at these points? b)Calculate are elasticity at the interval between P=$5 and P=$6. c)At which price would a change in price and quantity result in approximately no change in total revenue? Why?
The demand function for a soda is Q=20-2P , where Q stands for quantity and P for price. a)Calculate point elasticities at prices of 5 and 9. Is the demand curve elastic or inelastic at these points? b)Calculate are elasticity at the interval between P=$5 and P=$6. c)At which price would a change in price and quantity result in approximately no change in total revenue? Why?
Chapter5: Elasticity Of Demand And Supply
Section: Chapter Questions
Problem 1.1P: (Calculating Price Elasticity of Demand) Suppose that 50 units of a good are demanded at a price of...
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The demand function for a soda is Q=20-2P , where Q stands for quantity and P for price.
a)Calculate point elasticities at prices of 5 and 9. Is the demand curve elastic or inelastic at these points?
b)Calculate are elasticity at the interval between P=$5 and P=$6.
c)At which price would a change in price and quantity result in approximately no change in total revenue? Why?
d)If the supply function for the soda is Q= -5+3P, calculate the
e)If the government imposes a floor price of $7, would you think that this floor price is binding.( Show your work on a diagram.)
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