Use the market demand on #3 and identify the range of price that will give a/anD. perfectly elastic demandE. perfectly inelastic demand Assume equations 1 and 2 below were estimated from the data gathered that will representthe demand and supply functions respectively of an individual buyer and seller respectivelyfor product X.Eq. 1Eq. 2Qdx = 65,000 – 11.25Px + 15P, – 3.751 + 7.5AQsx = 7,500 + 14.25Px – 15P, – 3.75Cwhere Px – price of product X; Py – price of product Y; I – average consumer's income; Aadvertising expenditure; Pz – price of product Z; and C – cost of production.Use the following additional information: the price of a related product, Y, is P41.25; theaverage consumer's income is P12,000; advertising expenditure is P2,500; the price of productZ is P90; and the cost of production is P1,200. There are 30 identical buyers and 50 identicalsellers in the market for product X.

We have been given the individual demand function Qx=65,000-11.25Px+15Py-3.75I+7.5A ...…

Answered: Use the market demand on #3 and…

Use the market demand on #3 and identify the range of price that will give a/an D. perfectly elastic demand E. perfectly inelastic demand

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

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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Question

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Use the market demand on #3 and identify the range of price that will give a/an

D. perfectly elastic demand
E. perfectly inelastic demand

Assume equations 1 and 2 below were estimated from the data gathered that will represent
the demand and supply functions respectively of an individual buyer and seller respectively
for product X.
Eq. 1
Eq. 2
Qdx = 65,000 – 11.25Px + 15P, – 3.751 + 7.5A
Qsx = 7,500 + 14.25Px – 15P, – 3.75C
where Px – price of product X; Py – price of product Y; I – average consumer's income; A
advertising expenditure; Pz – price of product Z; and C – cost of production.
Use the following additional information: the price of a related product, Y, is P41.25; the
average consumer's income is P12,000; advertising expenditure is P2,500; the price of product
Z is P90; and the cost of production is P1,200. There are 30 identical buyers and 50 identical
sellers in the market for product X.

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