Microeconomics (9th Edition) (Pearson Series in Economics)
9th Edition
ISBN: 9780134184241
Author: Robert Pindyck, Daniel Rubinfeld
Publisher: PEARSON
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Textbook Question
Chapter 2, Problem 7E
In 2010, Americans smoked 315 billion cigarettes, or 15.75 billion packs of cigarettes. The average retail
a. Using this information, derive linear demand and supply
b. In 1998, Americans smoked 23.5 billion packs of cigarettes, and the retail price was about $2.00 per pack. The decline in cigarette consumption from 1998 to 2010 was due in part to greater public awareness of the health hazards from smoking, but was also due in part to the increase in price. Suppose that the entire decline was due to the increase in price. What could you deduce from that about the price elasticity of demand?
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Fill out the tables by calculating the price elasticity of demand and of supply (use the mid-point formula). Report elasticities with 2 decimals.
Demand and Supply Schedule for Good X:
Unit price of x
Quantity demanded of x
Quantity supplied of x
Price elasticity of demand of x (2 decimals)
Price elasticity of supply of x
(2 decimals)
$100
0
5
n/a
n/a
$95
2
4.5
$90
4
4
$85
6
3.5
$80
8
3
$75
10
2.5
$70
12
2
$65
14
1.5
$60
16
1
$55
18
0.5
Demand and Supply Schedule for Good Y:
Unit price of y
Quantity demanded of y
Quantity supplied of y
Price elasticity of demand of y
(2 decimals)
Price elasticity of supply of y
(2 decimals)
$100
10
40
n/a
n/a
$90
11
35
$80
12
30
$70
13
25
$60
14
20
$50
15
15
$40
16
10…
Chapter 2 Solutions
Microeconomics (9th Edition) (Pearson Series in Economics)
Ch. 2 - Prob. 1RQCh. 2 - Prob. 2RQCh. 2 - If a 3-percent increase in the price of corn...Ch. 2 - Prob. 4RQCh. 2 - Explain why for many goods, the long-run price...Ch. 2 - Why do long-run elasticities of demand differ from...Ch. 2 - Prob. 7RQCh. 2 - Prob. 8RQCh. 2 - Prob. 9RQCh. 2 - In a discussion of tuition rates, a university...
Ch. 2 - Suppose the demand curve for a product is given by...Ch. 2 - Prob. 12RQCh. 2 - Prob. 13RQCh. 2 - Prob. 1ECh. 2 - Consider a competitive market for which the...Ch. 2 - Prob. 3ECh. 2 - Prob. 4ECh. 2 - Prob. 5ECh. 2 - Prob. 6ECh. 2 - In 2010, Americans smoked 315 billion cigarettes,...Ch. 2 - In Example 2.8 we examined the effect of a...Ch. 2 - In Example 2.8 (page 52), we discussed the recent...Ch. 2 - Prob. 12E
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