Answered: The short-run supply of rental cars is…

The short-run supply of rental cars is (nearly) perfectly inelastic. Explain why. Your response should relate to the types of the costs rental car companies face in the short run.

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter5: Price Elasticity Of Demand And Supply

Section: Chapter Questions

Problem 5SQ: Price elasticity of demand tends to be larger in the long run than in the short run. Which of the...

See similar textbooks

Related questions

Q: Can you think of an industry (or product) with near infinite elasticity of supply in the short term?…

A: The response of a good or service's supply to a change in its market price is measured by its price…

Q: If a bottle of Ms. Dior perfume currently sells for $49.99 per bottle, a decrease in price to $42.99…

A: The perfectly elastic demand would mean when the quantity demand changes drastically when the price…

Q: Small businesses typically do not observe the demand curves for the products they sell. For example,…

A: A commerce which functions on a small range level involves fewer wealth ventures, fewer numeral of…

Q: (Figure: Determining Long-Run Adjustments) The figure depicts the cost curves for a firm in a…

A: In a perfectly competitive market there are many firms producing identical goods

Q: Bill runs a business that makes custom-printed towels. It will cost him $8 each to purchase and…

Q: Mango Systems believes that demand for its pet e-mouse follows a linear demand equation: Quantity =…

A: A connection between cost, sales, and profit is established via the contribution margin idea. The…

Q: Exercise 5.4 A company is producing and selling branded milk with the following total cost…

A: In economics, production decision is the action of settling the optimal level of production that a…

Q: Q1. Calculate the Income Elasticity of Demand (IED) and explain whether hotels are normal or…

A: a) Income elasticity of demand is the percentage change in the quantity demanded as response to a…

Q: What kind of firm can sell all its product at the market price but nothing above that price?

A: In case of Perfect Competition, there are large number of buyers and sellers. The sellers sell…

Q: The price of petrol increases by 20% and remains at the new higher level. Which of the following…

A: Here, it is given that the price change by 20% will lead to provide a new higher level, which…

Q: Increasing demand from China has made New Zealand the world's biggest exporter of dairy products .…

A: Economies of scale occur when the price per unit drops as production volume rises. In other words,…

Q: BigSwaba Corp produces virus home test kits which it sells in the market. It pays a marketing…

A: Given demand function P=48+m^0.5-0.5q TC=200+0.5q^2+m

Q: Assume you are managing a food processing plant in Ethiopia. The demand function for one of your…

A: a) First we will find Qd when price equal to 15 Qd = 50 - 2p Qd = 50 - 2×15 = 50 - 30 = 20 Point…

Q: Daffy’s is a pet care company that recently increased the average price of its services by 5%. As a…

A: Answer: Daffy is a pet care company and Baffy is a pet adoption company. When Buffy, a pet adoption…

Q: Francine is a a dental floss tycoon living in Montana.  She faces the following demand curve for her…

A: Price elasticity of demand measures the responsiveness of the demand of a commodity to a change in…

Q: The short-run market demand and supply for Kente cloth are expressed as follows: Demand:P=40-0.25Q…

A: ANS Demand : P = 40 – 0.25Q Supply : P = 5 + 0.05Q Total Revenue (TR) = Price × Quantity demanded.…

Q: Average Real Price/Ton Nominal Nominal Mfg. Rep's Earnings Revenue Commission Total Cost before Tax…

A: To know the profit maximization, MR=MC must satisfy. To check that:

Q: At what quantity does the firm break even? 4. Calculate the price elasticity of demand at the…

A: Demand Function: P = 40 – 1.5q TC=q2+10q+50

Q: In general, supply and demand are often in elastic in the short run, so that shifts in either demand…

A: Elasticity is an economic idea used to measure the change in the aggregate quantity demanded of a…

Q: Answer the question using the 3 -step approach 2. Due to Covid 19, there has been a major delay…

A: Change in demand and supply occurs due to change in factors other than price. Increase in demand and…

Q: Term used to describe demand that can be accuratelycalculated to meet the need of a production…

A: Demand shows the quantity of good and service that a consumer is willing to buy at the given price…

Q: Daffy’s is a pet care company that recently increased the average price of its services by 5%. As a…

A: The concept used here is of price elasticity of demand. Price elasticity of demand refers to…

Q: nanufacturer of hospital supplies has a uniform annual demand for 180,000 boxes of bandages. It…

A: Supply and demand represent the working of a market and the cooperation among providers and…

Q: Consider the graph above. If the demand curve intersects the marginal & average cost curve at 100…

A: The demand curve is a downward-sloping curve that represents the relationship between quantity…

Q: A bakery that produces 100 loaves of bread has a variable cost of $50 and a fixed cost of $200.…

A: Marginal cost is the change in total cost when another unit is produced; average cost is the total…

Q: If another phone service provider enters the market and forces Connecting U to drop the price of a…

A: Price elasticity of demand refers to the change in quantity demanded of a good in response to change…

Question

The short-run supply of rental cars is (nearly) perfectly inelastic. Explain why. Your response should relate to the types of the costs rental car companies face in the short run.

AI-Generated Solution

AI-generated content may present inaccurate or offensive content that does not represent bartleby’s views.

Unlock instant AI solutions

Tap the button
to generate a solution

Click the button to generate
a solution

SEE SOLUTION

Similar questions

Question 15.15. Two months ago, the Marbury Shirt company sold 200 shirts at $30 per shirt. Last month, the company raised its price to $35 per shirt and sold 300 shirts. Evidently the company experienced a(n) decrease in demand. increase in demand. decrease in supply. increase in supply.
Term used to describe demand that can be accuratelycalculated to meet the need of a production schedule,for example.
Daffy’s is a pet care company that recently increased the average price of its services by 5%. As a result, the number of customers dropped by 4%. Buffy’s, a pet adoption company, opens up right next door to Daffy’s. How will this likely impact the demand for services at Daffy’s?
The price of petrol increases by 20% and remains at the new higher level. Which of the following statements is likely to be true? The price elasticity of demand will be higher a few years after the price change a The quantity of petrol supplied will decrease The price elasticity of demand for petrol will not be affected by the change in the price of petrol over the long run d Demand for petrol will increase after people adjust to the new higher price The price elasticity of demand will be lower a few years after the price change
What effect will each of the following have on the supply of auto tires? An increase in the price of rubber used in the production of tires.
George has been selling 5,000 T-shirts per month for $8.50. When he increased the price to $9.50, he sold only 4,000 T-shirts. Which of the following best approximates the price elasticity of demand? -2 -2.2 -2.6 -1.8 Suppose George's marginal cost is $5 per shirt. Before the price change, George's initial price markup over marginal cost was approximately . George's desired markup is . Since George's initial markup, or actual margin, was than his desired margin, raising the price was .
XYZ Co. makes a processor that requires a metal that can be found in a single mine in Peru. Do you expect the price elasticity of supply for this processor to be elastic or inelastic? Explain your answer in approximately 1-4 sentences.
What effect will each of the following have on the supply of auto tires? A technological advance in the methods of producing tires.
Q) The short-run market demand andsupply for Kente cloth are expressed as follows:Demand:P=40-0.25QSupply: P=5+0.05QMarginal cost: -20+4Q a) Find short run level of output.
Optimal Price. Last week, Wally's Burgers, Inc. reduced the average price on the 1/2-pound Papa burger by 1%. In response, sales jumped by 2%.A. Calculate the point price elasticity of demand for Papa burgers.B. Calculate the optimal price for Papa burgers if marginal cost is $1 per unit.
XYZ Co. makes a processor that requires a metal that can only be found in a single mine in Peru. Do you expect the price elasticity of supply for this processor to be elastic or inelastic? Explain.
It has been mentioned that there should be a match of supply and demand in a company that produces spare parts.Department A can produce parts at a rate of 80/day.Department B uses those parts at the rate of 10/day.Each day unused parts are added to inventory.At what rate does inventory of unused parts buid up?