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- 2. The accompanying table lists the cross - price elasticities of demand for several goods, where the percent quantity change is measured for the first good of the pair, and the percent price change is measured for the second good. a. Explain the sign of each of the cross - price elasticities. What does it imply about the relationship between the two goods in question? b. Compare the absolute values of the cross - price elasticities and explain their magnitudes. For example, why is the cross - price elasticity of McDonald's burgers and Burger King burgers less than the cross - price elasticity of butter and margarine? Use the information in the table to calculate how a 5% increase in the price of Pepsi affects the quantity of Coke demanded. d. Use the information in the table to calculate how a 10% decrease in the price of gasoline affects the quantity of SUVS demanded. Cross-price Good elasticities of demand Air - conditioning units and kilowatts of electricity Coke and Pepsi High -…6. The demand for coffee is given by the function: Q = 8.5-p-0.3p + 0.1Y, where p is the price of coffee, ps is the price of sugar, and Yis consumer income. a. Calculate the income elasticity of demand when Q = 10 and Y = 30 and interpret your answer. b. Calculate the cross-price elasticity of demand when Q = 1 and P = 0.6 and interpret your answer.. Suppose that Brock raises its tuition by 30% to pay for higher professor salaries.2 An economics professor asks his students, “Due to the tuition increase, how many of you will transfer to another universiy or drop out?” One student out of every 2 says that he or she would transfer or drop out. Based on this information, the price elasticity of demand for education at this university is: (A) 1. (B) Elastic. (C) Inelastic. (D) Zero.
- b. "In terms of condiments and spices locals normally consume chive and celery together. For root crops, dasheen and eddoes are often combined." iii. Apply the cross elasticity of demand formula to explain why a decrease in the price for eddoes from January to February caused an increase in demand for dasheen over the same period.what is the chinese elasticity demand? also need drawing of graph pleaseI need help with a a) What is the price elasticity of demand for hamburger buns? Please provide a numerical answer. If your answer is decimal, please include all decimal digits. If your answer is negative, please put a negative sign in the front. If your answer is a decimal number between -1 and 1, for example, -0.523, please do not omit the zero (meaning that you should have -0.523 in the answer box, not -.523). b) What is the cross-price elasticity of demand for hamburger buns? Please provide a numerical answer. If your answer is decimal, please include all decimal digits. If your answer is negative, please put a negative sign in the front. If your answer is a decimal number between -1 and 1, for example, -0.523, please do not omit the zero (meaning that you should have -0.523 in the answer box, not -.523). c) What is the income elasticity of demand for hamburger buns? Please provide a numerical answer. If your answer is decimal, please include all decimal digits. If your answer…
- 2. If the price of Beer is $2 a bottle, Biff is willing to buy 30 bottles. If the price of Beer is $4 a bottle, Biff is willing to buy 20 bottles. What is Biff's Price Elasticity of Demand? Is his demand elastic or inelastic?a. Explain what “cross-elasticity of demand” is. b. What is a “substitute good”? Give an example. Does it have a positive or negative cross-elasticity of demand?Define the elasticity in economics. Relate it with elasticity of demand and supply. Pls give proper explanation.
- 1. Calculate the Price elasticity of demand, & for the following examples: a) Demand is given by Q = 50 – P at the price of $10. b) Demand is given by Q= 100 - P, at the price of $50. %3D c) Demand is given by Q= 25 - .25P, at the price of $40. d) Demand is given by Q = 20 - .1P, at the price of $80. e) Demand is given by Q = 60 – 1/3P, at the price of $60.1.An auto rental company lowers the price of its rentals to increase its market share. The price cut increases quantity demandedbut total revenue decreases. This result suggests that over this price range, the demand for the auto rentals is elastic inelestic unit elastic. The cross elasticity of demand between Quaker State motor oil and Texaco motor oil is likely to beMultiple Choicezeroa positive number.a small negative number.a large negative number. The law of supply indicates that the price-elasticity of supply coefficient would have a negative sign. TrueFalse1.Suppose the price of gasoline rises from $1.89 to 2.17 per gallon, and in response the quantity demanded decreases from 20,000 to 18,000 gallons. a. What is the price elasticity of demand?