Price Elasticity of Demand (Ed) Ignore the MINUS sign in the coefficient for Price Ed 1. When bicycles were $50, the quantity was 20/day, however, when the price rose to $60 the Quantity Demanded dropped to 15. Calculate coefficient: Cite Elasticity: Elastic What happens to TOTAL REVENUE: TR decreases Calculate coefficient: 2. When price drops from $1.00 to $.70, Quantity Demanded increased from 50 to 75 units. Cite Elasticity: Calculate coefficient: What happens to TOTAL REVENUE: 3. Price dropped from $0.70 to $0.60 and Quantity Demanded rose from 10 to 12 units. Cite Elasticity: (QD (NEW) -QD(OLD))/[(QD(NEW)+QD(OLD))/2] (P(NEW) -P(OLD)) /[(P(NEW)+P(OLD))/2] (15 – 20) / [(15 +20)/2] = -5/17.5 = -.286 = -1.57 (60 -50) / [(60 +50)/2] 10 / 55 .182 Calculate coefficient: What happens to TOTAL REVENUE: 4. Price rises from $1.50 to $2 and Quantity Demanded decreases from 1000 to 900 units. Cite Elasticity: What happens to TOTAL REVENUE: EXPLAIN: 5. When Cottonwood City Transit Authority raised bus fares, its total revenue increased, which shows that demand for travel is: ELASTIC/INELASTIC
Price Elasticity of Demand (Ed) Ignore the MINUS sign in the coefficient for Price Ed 1. When bicycles were $50, the quantity was 20/day, however, when the price rose to $60 the Quantity Demanded dropped to 15. Calculate coefficient: Cite Elasticity: Elastic What happens to TOTAL REVENUE: TR decreases Calculate coefficient: 2. When price drops from $1.00 to $.70, Quantity Demanded increased from 50 to 75 units. Cite Elasticity: Calculate coefficient: What happens to TOTAL REVENUE: 3. Price dropped from $0.70 to $0.60 and Quantity Demanded rose from 10 to 12 units. Cite Elasticity: (QD (NEW) -QD(OLD))/[(QD(NEW)+QD(OLD))/2] (P(NEW) -P(OLD)) /[(P(NEW)+P(OLD))/2] (15 – 20) / [(15 +20)/2] = -5/17.5 = -.286 = -1.57 (60 -50) / [(60 +50)/2] 10 / 55 .182 Calculate coefficient: What happens to TOTAL REVENUE: 4. Price rises from $1.50 to $2 and Quantity Demanded decreases from 1000 to 900 units. Cite Elasticity: What happens to TOTAL REVENUE: EXPLAIN: 5. When Cottonwood City Transit Authority raised bus fares, its total revenue increased, which shows that demand for travel is: ELASTIC/INELASTIC
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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please help me do this worksheet
![Price Elasticity of Demand (Ed)
OLD))/2]
Ignore the MINUS sign in the coefficient for Price Ed
1. When bicycles were $50, the quantity was 20/day, however, when the price rose to $60 the Quantity Demanded
dropped to 15.
Calculate coefficient:
Cite Elasticity: Elastic
What happens to
TOTAL REVENUE: TR decreases
Calculate coefficient:
(QD(NEW) -QD(OLD))/[(QD(NEW)+QD(OLD))/2]
(P(NEW) -P(OLD)) /[(P(NEW)+P(OLD))
(15 – 20) / [(15 + 20)/2] = -5/17.5 = -.286
(60 - 50) / [(60+50)/2] = 10/55
.182
2. When price drops from $1.00 to $.70, Quantity Demanded increased from 50 to 75 units.
Calculate coefficient:
Cite Elasticity:
What happens to
TOTAL REVENUE:
3. Price dropped from $0.70 to $0.60 and Quantity Demanded rose from 10 to 12 units.
Calculate coefficient:
Cite Elasticity:
What happens to
TOTAL REVENUE:
=
Cite Elasticity:
What happens to
TOTAL REVENUE:
4. Price rises from $1.50 to $2 and Quantity Demanded decreases from 1000 to 900 units.
EXPLAIN:
-1.57
5. When Cottonwood City Transit Authority raised bus fares, its total revenue increased, which shows that
demand for travel is: ELASTIC/INELASTIC](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F1ca56ad7-b35b-45a6-87bc-076acd474bab%2F8184f623-b0a1-44ff-9405-d66e5fe5e1bb%2Ff0pzwup_processed.png&w=3840&q=75)
Transcribed Image Text:Price Elasticity of Demand (Ed)
OLD))/2]
Ignore the MINUS sign in the coefficient for Price Ed
1. When bicycles were $50, the quantity was 20/day, however, when the price rose to $60 the Quantity Demanded
dropped to 15.
Calculate coefficient:
Cite Elasticity: Elastic
What happens to
TOTAL REVENUE: TR decreases
Calculate coefficient:
(QD(NEW) -QD(OLD))/[(QD(NEW)+QD(OLD))/2]
(P(NEW) -P(OLD)) /[(P(NEW)+P(OLD))
(15 – 20) / [(15 + 20)/2] = -5/17.5 = -.286
(60 - 50) / [(60+50)/2] = 10/55
.182
2. When price drops from $1.00 to $.70, Quantity Demanded increased from 50 to 75 units.
Calculate coefficient:
Cite Elasticity:
What happens to
TOTAL REVENUE:
3. Price dropped from $0.70 to $0.60 and Quantity Demanded rose from 10 to 12 units.
Calculate coefficient:
Cite Elasticity:
What happens to
TOTAL REVENUE:
=
Cite Elasticity:
What happens to
TOTAL REVENUE:
4. Price rises from $1.50 to $2 and Quantity Demanded decreases from 1000 to 900 units.
EXPLAIN:
-1.57
5. When Cottonwood City Transit Authority raised bus fares, its total revenue increased, which shows that
demand for travel is: ELASTIC/INELASTIC
![6. Income rose from $300 to $350/week and QD fell from 8 to 4 units.
(4 − 8) / [(4 + 8)/2]
(350-300) / [(350 + 300)/2]
Calculate coefficient:
Cite Elasticity: Elastic
Type of good: Inferior Good
7. Income fell from $500 to $250/week and QD increased from 1 to 5 units.
Calculate coefficient:
Cite Elasticity:
Type of good:
8. Income increased from $400 to $700/week and QD rose from 4 to 10/week.
Calculate coefficient:
Cite Elasticity:
Type of good:
9. Income fell from $1000 to $600/week and QD fell from 12 to 10 units/week.
Calculate coefficient:
Cite Elasticity:
= -4/6 =
= 50/325 =
Type of good:
Cite Elasticity:
Type of good:
10. Income rose from $24,000 to $28,000/year and QD for books rose from 40 to 60/year.
Calculate coefficient:
Page 124 (368)
- .667
.154
= - 4.33](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F1ca56ad7-b35b-45a6-87bc-076acd474bab%2F8184f623-b0a1-44ff-9405-d66e5fe5e1bb%2Fazdpswh_processed.png&w=3840&q=75)
Transcribed Image Text:6. Income rose from $300 to $350/week and QD fell from 8 to 4 units.
(4 − 8) / [(4 + 8)/2]
(350-300) / [(350 + 300)/2]
Calculate coefficient:
Cite Elasticity: Elastic
Type of good: Inferior Good
7. Income fell from $500 to $250/week and QD increased from 1 to 5 units.
Calculate coefficient:
Cite Elasticity:
Type of good:
8. Income increased from $400 to $700/week and QD rose from 4 to 10/week.
Calculate coefficient:
Cite Elasticity:
Type of good:
9. Income fell from $1000 to $600/week and QD fell from 12 to 10 units/week.
Calculate coefficient:
Cite Elasticity:
= -4/6 =
= 50/325 =
Type of good:
Cite Elasticity:
Type of good:
10. Income rose from $24,000 to $28,000/year and QD for books rose from 40 to 60/year.
Calculate coefficient:
Page 124 (368)
- .667
.154
= - 4.33
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- When Cottonwood City Transit Authority raised bus fares, its total revenue increased, which shows that
demand for travel is: ELASTIC/INELASTIC
EXPLAIN:
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