MACROECONOMICS FOR TODAY-W/LMS MINDTAP
9th Edition
ISBN: 9781305927117
Author: Tucker
Publisher: CENGAGE L
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Chapter 10, Problem 11SQ
To determine
Identify the correct option that will not shift the aggregate
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Given the demand equation Q
following table (using Excel):
=
1,500 200P, calculate all the numbers necessary to fill in the
Elasticity
P
Q Point Arc
Total
Revenue Revenue
Marginal
$7.00
6.50
6.00
5.50
5.00
4.50
4.00
3.50
3.00
2.50
Suppose a firm has the following demand equation:
where Q = quantity demanded
P = product price (in dollars)
Q=1,000 3,000P + 10A
A = advertising expenditure (in dollars)
Assume for the following questions that P =3$ and A = $2,000.
1. Suppose the firm dropped the price to $2.50. Would this be beneficial? Explain. Illustrate
your answer with the use of a demand schedule and demand curve.
2. Suppose the firm raised the price to $4.00 while increasing its advertising expenditure by $100.
Would this be beneficial? Explain. Illustrate your answer with the use of a demand schedule
and a demand curve. (Hint: First construct the schedule and the curve assuming A = $2,000.
Then construct the new schedule and curve assuming A = $2,100.)
ABC Sports, a store that sells various types of sports clothing and other sports items, is planning
to introduce a new design of Arizona Diamondbacks' baseball caps. A consultant has estimated the
demand curve to be
where Q is cap sales and P is price.
Q=2,000 100P
1. How many caps could ABC sell at $6 each?
2. How much would the price have to be to sell 1,800 caps?
3. Suppose ABC were to use the caps as a promotion. How many caps could ABC give away
free?
4. At what price would no caps be sold?
5. Calculate the point price elasticity of demand at a price of $6.
Chapter 10 Solutions
MACROECONOMICS FOR TODAY-W/LMS MINDTAP
Ch. 10.7 - Prob. 1YTECh. 10.A - Prob. 1SQPCh. 10.A - Prob. 2SQPCh. 10.A - Prob. 3SQPCh. 10.A - Prob. 4SQPCh. 10.A - Prob. 5SQPCh. 10.A - Prob. 6SQPCh. 10.A - Prob. 1SQCh. 10.A - Prob. 2SQCh. 10.A - Prob. 3SQ
Ch. 10.A - Prob. 4SQCh. 10.A - Prob. 5SQCh. 10.A - Prob. 6SQCh. 10.A - Prob. 7SQCh. 10.A - Prob. 8SQCh. 10.A - Prob. 9SQCh. 10.A - Prob. 10SQCh. 10.A - Prob. 11SQCh. 10.A - Prob. 12SQCh. 10.A - Prob. 13SQCh. 10.A - Prob. 14SQCh. 10.A - Prob. 15SQCh. 10.A - Prob. 16SQCh. 10.A - Prob. 17SQCh. 10.A - Prob. 18SQCh. 10.A - Prob. 19SQCh. 10.A - Prob. 20SQCh. 10 - Prob. 1SQPCh. 10 - Prob. 2SQPCh. 10 - Prob. 3SQPCh. 10 - Prob. 4SQPCh. 10 - Prob. 5SQPCh. 10 - Prob. 6SQPCh. 10 - Prob. 7SQPCh. 10 - Prob. 8SQPCh. 10 - Prob. 9SQPCh. 10 - Prob. 10SQPCh. 10 - Prob. 11SQPCh. 10 - Prob. 1SQCh. 10 - Prob. 2SQCh. 10 - Prob. 3SQCh. 10 - Prob. 4SQCh. 10 - Prob. 5SQCh. 10 - Prob. 6SQCh. 10 - Prob. 7SQCh. 10 - Prob. 8SQCh. 10 - Prob. 9SQCh. 10 - Prob. 10SQCh. 10 - Prob. 11SQCh. 10 - Prob. 12SQCh. 10 - Prob. 13SQCh. 10 - Prob. 14SQCh. 10 - Prob. 15SQCh. 10 - Prob. 16SQCh. 10 - Prob. 17SQCh. 10 - Prob. 18SQCh. 10 - Prob. 19SQCh. 10 - Prob. 20SQ
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