When the price of good Y increases from $2 to $3, the quantity demanded for good X decreases from 20 units to 10 units. Using the Midpoint Method for Elasticity, what is the cross-price elasticity of demand between goods X and Y. (Round all decimal calculations to the closest ten-thousandths so your percentages are rounded to the closest hundredths; round your final answer to the closest hundredths.) Are goods X and Y complements or substitutes?

When the price of good Y increases from $2 to $3, the quantity demanded for good X decreases from 20 units to 10 units. Using the Midpoint Method for Elasticity, what is the cross-price elasticity of demand between goods X and Y. (Round all decimal calculations to the closest ten-thousandths so your percentages are rounded to the closest hundredths; round your final answer to the closest hundredths.) Are goods X and Y complements or substitutes?

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter20: Elasticity: Demand And Supply

Section: Chapter Questions

Problem 13E: Using the following equation for the demand for a good or service, calculate the price elasticity of...

See similar textbooks

Similar questions

When the price of good Y increases from $2 to $3, the quantity demanded for good X decreases from 20 units to 10 units. Using the Midpoint Method for Elasticity, what is the cross-price elasticity of demand between goods X and Y. (Round all decimal calculations to the closest ten-thousandths so your percentages are rounded to the closest hundredths; round your final answer to the closest hundredths.) Are goods X and Y complements or substitutes? BIU AT A Use the editor to formot your answer .... E. ¶ 5 00 ▾
When the price of good Y increases from $2 to $3, the quantity demanded for good X decreases from 20 units to 10 units. Using the Midpoint Method for Elasticity, calculate the cross-price elasticity of demand between goods X and Y. (Round all decimal calculations to the closest ten-thousandths so your percentages are rounded to the closest hundredths; round your final answer to the closest hundredths.) Are goods X and Y complements or substitutes?
Suppose you work for a local car parts supplier, and you’re looking at ways to increase revenue. You remember from your economics course, that people respond to price changes. You decide to test this theory. Assume, that as the price of an alternator falls from $40.00 to $38.00 the quantity of Y demanded increases from 110 to 118. Then the coefficient of price elasticity of demand is: If you want to increase revenue, you should:
Calculating the price elasticity of demand: A step-by-stepguide Suppose that during the past year, the price of a virtual reality headset rose from $4,100 to $4,550. During the same time period, consumer sales decreased from 420,000 to 313,000 headsets. Calculate the elasticity of demand between these two price–quantity combinations by using the following steps. After each step, complete the relevant part of the table with the appropriate answers. (Note: For decreases in price or quantity, enter values in the Change column with a minus sign.) Original New Average Change Percentage Change Quantity Price Step 1: Fill in the appropriate values for original quantity, new quantity, original price, and new price. Step 2: Calculate the average quantity by adding the original quantity and the new quantity, and then dividing by two. Do the same for the average price. Step 3: Calculate the change in quantity…
Calculate accurately Suppose 10 units of a good are sold when the price is $2 per unit, and 14 units are sold at a price of $1 per unit. Calculate the price elasticity of demand for this good over this price range using the midpoint formula. Does your answer suggest the demand is elastic or inelastic?
Suppose the own-price elasticity of demand for beef is -0.8 and the own-price elasticity of supply of beef is 0.9. Due to a newly introduced government policy, beef supply increases by 2% with no change in the demand for beef. Assuming that the current price for beef is 40/cwt and the quantity bought and sold is 2,000 cwt per day, find the new equilibrium price and quantity of beef (round your answers to two decimal places).
Suppose that during the past year, the price of a laptop computer fell from $2,950 to $2,450. During the same time period, consumer sales increased from 430,000 to 619,000 laptops. Calculate the price elasticity of demand between these two price–quantity combinations by using the following steps. After each step, complete the relevant part of the table with the appropriate answers. (Note: For decreases in price or quantity, enter values in the Change column with a minus sign.) Original New Average Change Percentage Change Quantity Price Step 1: Fill in the appropriate values for original quantity, new quantity, original price, and new price. Step 2: Calculate the average quantity by adding the original quantity and the new quantity and then dividing by 2. Do the same for the average price. Step 3: Calculate the change in quantity by subtracting the original quantity from the new quantity. Do…
Suppose that during the past year, the price of a laptop computer fell from $2,500 to $2,300. During the same time period, consumer sales increased from 403,000 to 549,000 laptops. Calculate the elasticity of demand between these two price–quantity combinations by using the following steps. After each step, complete the relevant part of the table with the appropriate answers. (Note: For decreases in price or quantity, enter values in the Change column with a minus sign.) Original New Average Change Percentage Change Quantity Price Step 1: Fill in the appropriate values for original quantity, new quantity, original price, and new price. Step 2: Calculate the average quantity by adding the original quantity and the new quantity, and then dividing by two. Do the same for the average price. Step 3: Calculate the change in quantity by subtracting the original quantity from the new quantity. Do the same for the…
Suppose that during the past year, the price of a virtual reality headset rose from $4,700 to $4,980. During the same time period, consumer sales decreased from 397,000 to 289,000 headsets. Calculate the elasticity of demand between these two price-quantity combinations by using the following steps. After each step, complete the relevant part of the table with the appropriate answers. (Note: For decreases in price or quantity, enter values in the Change column with a minus sign.) Original Quantity Price $ $ New Average $ Change $ Percentage Change
Calculate the elasticity for the following questions (USING THE MIDPOINT (AVERAGE) FORMULA) and indicate if the goods are: 1. Inferior, 2. Normal, 3. Complements, or 4. Substitutes (Please Include The Negative signs in your answers where appropriate and calculate to 2 decimals) A. The price of gasoline increases from 16 per barrel to 30 per barrel and as a result, the demand per month for new cars changes from 550 to 300. Part 1: The elasticity is Number Part 2: These goods are (answer using numbers, 1-4) Number B. As a résult of a change in income from 1,975 to 3,875 per month, the consumption of good X changes from 300 to 600 units. Part 3: The elasticity is Number Part 4: Good X is a(an) (answer using numbers, 1-4) Number C. As a result of a decrease in the price of good Y from 39 to 12 the demand for good X changes from 150 to 500 units. Part 5: The elasticity is Number Part 6: These goods are(answer using numbers, 1-4) Number D. As a result of an economic boom in Calgary, the…
Suppose that during the past year, the price of a laptop computer rose from $2,750 to $2,880. During the same time period, consumer sales decreased from 446,000 to 321,000 laptops. Calculate the elasticity of demand between these two price-quantity combinations by using the following steps. After each step, complete the relevant part of the table with the appropriate answers. (Note: For decreases in price or quantity, enter values in the Change column with a minus sign.) Original New Average Change Percentage Change Quantity -16.3% Price $4 24 $4 24 2.31% Step 1: Fill in the appropriate values for original quantity, new quantity, original price, and new price. Step 2: Calculate the average quantity by adding the original quantity and the new quantity and then dividing by 2. Do the same for the average price. Step 3: Calculate the change in quantity by subtracting the original quantity from the new quantity. Do the same for the change in price. Step 4: Calculate the percentage change in…
You are talking to your parents or grand parents. During the conversation you tell them that the price elasticity of Housing is 0.12 and Restaurant Meals is 2.27. The numbers don't make any sense to them and they ask you to explain what the numbers mean. Explain what the two numbers mean in layman terms.