Xin has been selling 4,000 T-shirts per month for $7.50. When she increased the price to $9.50, she sold only 1,000 T-shirts. Which of the following best approximates the price elasticity of demand? -5.1 -3.06 -5.61 -4.59 Suppose Xin's marginal cost is $4 per shirt. Before the price change, Xin's initial price markup over marginal cost was approximately Since Xin's initial markup, or actual margin, was . Xin's desired markup is than her desired margin, raising the price was

Xin has been selling 4,000 T-shirts per month for $7.50. When she increased the price to $9.50, she sold only 1,000 T-shirts. Which of the following best approximates the price elasticity of demand? -5.1 -3.06 -5.61 -4.59 Suppose Xin's marginal cost is $4 per shirt. Before the price change, Xin's initial price markup over marginal cost was approximately Since Xin's initial markup, or actual margin, was . Xin's desired markup is than her desired margin, raising the price was

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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a) Suppose the price of flour increases from $0.60 to $1.10 a pound and the quantity demanded decreases from 100 pounds to 60 pounds. Using the midpoint method, what is the price elasticity of demand for flour? Is the demand for flour elastic or inelastic? b) A 15 percent increase in income brings about a 25 percent decrease in the demand for a good. What is the income elasticity of demand and is the good a normal good or an inferior good?
The table below gives part of the supply schedule for personal computers in the United States. Price Quantity Supplied before tech change $1,100 12,000 $900 8,000 a) Calculate the price elasticity of supply when price rises from $900 to $1,100 using the arc elasticity formula (the midpoint method). b) Now suppose that technology changes such that at every price, 1000 more computers are supplied. Now, as prices rise from $900 to $1,100, is the elasticity of supply smaller than, larger than, or equal to the elasticity in part a)? Price Quantity Supplied after tech change $1,100 13,000 $900 9,000 c) Does the change in b) change the slope of the supply curve? Are slope and elasticity the same thing? Explain.
Suppose a movie theater determines it can charge different prices to patrons who go to weekday matinees and people who attend evening and weekend shows. The movie theater's goal is to increase total revenue. See Hint The price elasticity of demand for weekend and evening patrons is -0.50, and the price elasticity of demand for matinee moviegoers is -2.80. Based on the price elasticity of demand for each group of people, how should the movie theater adjust its prices? Choose one: O A. Raise the price for matinee moviegoers, and keep the price the same for weekend and evening patrons. O B. Lower the price for matinee moviegoers, and raise the price for weekend and evening patrons. O C. Lower the price for matinee moviegoers, and keep the price the same for weekend and evening patrons. O D. Raise the price for matinee moviegoers, and lower the price for weekend and evening patrons.
The following graph shows two known points (X and Y) on a demand curve for oranges. (? 10 Y Demand 4 2 1 ㅜ 10 20 30 40 50 60 70 80 90 100 QUANTITY (Thousands of pounds of oranges) 0.05 0.2 0.25 According to the midpoint method, the price elasticity of demand for oranges between point X and point Y is approximately which suggests that the demand for oranges is between points X and Y. PRICE (Dollars per pound)
George has been selling 7,000 T-shirts per month for $7.00. When he increased the price to $9.00, he sold only 6,000 T-shirts. Which of the following best approximates the price elasticity of demand? -0.6769 -0.6154 -0.3077 -0.5538 Suppose George's marginal cost is $4 per shirt. Before the price change, George's initial price markup over marginal cost was approximately . George's desired markup is . Since George's initial markup, or actual margin, was than his desired margin, raising the price was
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5. Johnny Ringlet at SkateNation staged a President's Day promotion at his Roller Skating Rink last week. By reducing the entry price and skate rental from $5.50 to $3.50, the number of Skaters per week night increased from 40 to 60. Calculate the Arc Price Elasticity of demand at SkateNation. a) EQp = -0.90 b) Eqp = -1.11 c) EQp = 0.90 d) Eqp = 1.11
3. The Burrito Barn is considering a price reduction on the Firegut Burrito, which currently sells for the price of $5.00. Giuseppe, the proprietor of Burrito Barn, knows the price elasticity for the Firegut is roughly equal to -2.3 over the range being considered for the price change. The Firegut has been selling at the brisk pace of 500 burritos per week. To increase market share, Giuseppe would like to increase sales to 750 per week. What price should Giuseppe set?
Suppose that the demand for sweatshirts at the university bookstore is given by: P = 40 – 0.2Q A) Using the point elasticity method, price elasticity of demand at a price of $8 is B) Is the demand for sweatshirts elastic or inelastic at the price of $8?
Calculate the Elasticity Coefficient for the following scenario. Patty bakes pies, she sells them for $10 each and sells about 55 pies per week. But the price of her ingredients increased so she' s contemplating a price increase. She will raise the price to $12 and she estimates her demand will fall to 50 pies per week. Calculate the elasticity coefficient for Patty's Pies. Are Patty's Pies elastic or inelastic? Should she raise her prices? Or keep them the same? You should be able to show your work.
Denzil's Fried Chicken estimates its demand function for Chicken Dinners to be (see image) a. Given current price and income variables, how many chicken dinners are sold each month? b. What is the income elasticity of demand?