The table below shows part of the aggregate demand schedule for smartphones in the country of Alfuential:| Price $ P $ | Quantity demanded $ Q^D $ ||--------------|--------------------------|| $900 | 10,000 || $700 | 14,000 |i. **Demand Curve Plot and Elasticity Calculation:** - **Demand Curve:** Plot a linear demand curve using the given data points: ($900, 10,000) and ($700, 14,000). - **Price Elasticity of Demand:** Use the midpoint method to calculate the elasticity as price increases from $700 to $900. \[ \text{Elasticity} = \frac{(Q2 - Q1) / ((Q2 + Q1)/2)}{(P2 - P1) / ((P2 + P1)/2)} \] Where $ Q2 = 10,000 $, $ Q1 = 14,000 $, $ P2 = 900 $, and $ P1 = 700 $.ii. **Total Expenditure and Optimal Pricing:** - **Total Expenditure:** Calculate total expenditure for both price points. - At $700: $ 700 \times 14,000 $ - At $900: $ 900 \times 10,000 $ - **Price Decision:** Should suppliers charge $700 or $900? Analyze total revenue implications graphically and numerically.iii. **Impact of Increased Demand from Younger People:** - **Additional Demand:** Assume 1,000 more smartphones are demanded at each price point due to younger buyers. - **New Elasticity:** Recalculate the elasticity from $700 to $900 with the updated quantities and analyze how it compares to part (i).iv. **Long-Run Market Consideration:** - **Long-Run Demand Increase:** Assume a 10% increase in quantity demanded by all buyers. Recalculate elasticity with this adjustment. - **Long-Run Elasticity Analysis:** Compare long-run elasticity to previous calculations in parts (i) and (iii). Justify using numerical evidence.v. **Long-Run Pricing Decision:** - **Optimal Long-Run Price:** Based on calculated elasticities and total expenditures, determine if suppliers should charge $700 or $900 in the long run. Provide a e) Suppose GK is one of the firms in this industry. In the short run, GK treats the rent of its building as a fixed cost and labor as a variable cost. If rent for the building falls, explain briefly how this will affect GK’s costs in the short run, specifically: the average variable cost curve, the average total cost curve, and the marginal cost curve.

Hi, thank you for the question. As per our Honor code, we are allowed to attempt only the first…

The table below shows part of the aggregate demand schedule for smart phones in the country of Afluentia: Quantity demanded Price P $900 10,000 $700 14,000 i. Plot the demand curve for smart phones in Afluentia. Assume demand is linear. Calculate the price elasticity of demand when the price increases from $700 to $900 using the midpoint method. Make your calculations explicit. i. All else being the same, what is Afluentia's total expenditure on smart phones when the price is $700? And when the price is $900? All else being the same, should Afluentia's suppliers charge $700 or $900 for a smart phone? Why? Explain briefly; show graphically and make your calculations explicit. i. Now suppose younger people start also buying smart phones in Afluentia. This means 1,000 more smart phones are bought at any given price. As price increases from $700 to $900, is the price elasticity of aggregate demand now greater than, less than, or the same as it was in part (i)? Why? Explain briefly. Make any calculations explicit.

The table below shows part of the aggregate demand schedule for smart phones in the country of Afluentia: Quantity demanded Price P $900 10,000 $700 14,000 i. Plot the demand curve for smart phones in Afluentia. Assume demand is linear. Calculate the price elasticity of demand when the price increases from $700 to $900 using the midpoint method. Make your calculations explicit. i. All else being the same, what is Afluentia's total expenditure on smart phones when the price is $700? And when the price is $900? All else being the same, should Afluentia's suppliers charge $700 or $900 for a smart phone? Why? Explain briefly; show graphically and make your calculations explicit. i. Now suppose younger people start also buying smart phones in Afluentia. This means 1,000 more smart phones are bought at any given price. As price increases from $700 to $900, is the price elasticity of aggregate demand now greater than, less than, or the same as it was in part (i)? Why? Explain briefly. Make any calculations explicit.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

the % change in price of spaghetti between prices of $18 and $20 is 10.53. the elasticity of demand between the prices of $18 and $20 is -1.69. So, what is the % change in the quantity of spaghetti when the price changes from $18 to $20?
(i) InfoConsider the three demand functions in the file Elasticity. Calculate the elasticities of these three demand functions when the price of the product increases from P = $200 per unit to P = $400 per unit. Enter the elasticities as positive numbers. Elasticity of the red demand function = Elasticity of the green demand function = Elasticity of the blue demand function =..
Please help me to answer. See the attach photo below
What are the major determinants of a products price elasticity of demand? Studies indicate that the demand for Florida oranges, Bayer aspirin, watermelons, and airfares to Europe are elastic. Why?
Due to the COVID-19, the price of hand-sanitizer increases from 150 taka to 250 taka. In response, the quantity demanded declines from 20 units to 15 units.(a) Calculate the price elasticity of demand. (b) Explain if the demand is elastic or inelastic. Based on the elasticity, what change (increase, decrease, or keep it the same) in price the seller can do to maximize his total revenue? Explain your answer. Please answer Step by step. Answer must be correct.Do all calculation step by step.Don,t copy from any where. Must answer follow question.
Question 7
Demand for GPS Units 220 200 180- 160 - 140- 120- 100 80 60 40- 20- 40 60 120 160 200 240 260 320 360 400 440 Quantity (GPS units) Instructions: Round your answers to two decimal places. If you are entering any negative numbers be sure to include a negative sign () in front of those numbers. a. When going from a price of $120 per unit to a price of $100 per unit, what is the price elasticity of demand for GPS units? b. When going from a price of $100 per unit to a price of $120 per unit, what is the price elasticity of demand for GPS units? c. Using the midpoint formula, what is the midpoint price elasticity of demand for GPS units between a price of $120 per unit and a price of $100 per unit? d. When going from a price of $60 per unit to a price of $40 per unit, what is the price elasticity of demand for GPS units? e. When going from a price of $40 per unit to a price of $60 per unit, what is the price elasticity of demand for GPS units? t Using the midpoint formula, what is the…
Problem #3: From the data shown in the figure about demand for smart phones, calculate the price elasticity of demand from: point B to point Cand point D to point E. Classify the elasticity at each point as elastic, inelastic, or unit elastic. Points Price Quantity Demanded 70 3 000 80 2 800 90 2 400 100 2 200 E 110 2 000
Please assist. Thanks
Answer the attached question
Suppose that your demand schedule for DVDs is as follows: Price Quantity Demanded (income - $10,000) $8 40 DVDs 10 32 12 24 14 16 16 B Quantity Demanded I (income-$12,000) 50 DVDs 45 30 20 12 a. Use the midpoint method to calculate your price elasticity of demand as the price of DVDs increases from $12 to $16 if (i) your income is $10,000 and (ii) your income is $12,000. b. Calculate your income elasticity of demand as your income increases from $10,000 to $12,000 if (i) the price is $10 and (ii) the price is $14. c. Is the DVDs normal good or inferior good?
The price elasticity of supply is1.2,and price increases by 10percent. As a result, the quantity supplied will increase by how much?