Microeconomics
2nd Edition
ISBN: 9780073375854
Author: B. Douglas Bernheim, Michael Whinston
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 2, Problem 7P
To determine
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Star wars coffee mugs are traded in a competitive world market with a price of R180 per cup. Unlimited quantities are available for import into South Africa at this price. On average 10 000 kg are traded each month. The elasticity of demand has been estimated at -0.81 and elasticity of supply at 3.51. Derive the demand equation for the star wars coffee mug.
.
.
A. Qd = 12 800 - 45P
B. Qd = 15 200 - 35P
C. Qd = 18 100 - 45P
D. Qd = 20 000 - 50P
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A bakery works out a demand function for its chocolate chip cookies and finds it to be q = D(x) 895-11x, where q is the
quantity of cookies sold when the price per cookie, in cents, is x. Use this information to answer parts a) through f).
a) Find the elasticity.
E(x)=
b) At what price is the elasticity of demand equal to 1?
(Round to the nearest cent as needed.)
c) At what prices is the elasticity of demand elastic?
OA. Greater than 41c
OB. Less than 41c
OC. Prices are elastic at all values.
OD. Prices cannot be elastic in this case
d) At what prices is the elasticity of demand inelastic?
OA. Prices cannot be inelastic in this case
OB. Less than 41e
OC. Greater than 41
OD. Prices are inelastic al all values
e) At what price is the revenue a maximum?
x=
0-
(Round to the nearest cent as needed. Use a comma to separate answers as needed.)
At a price of 17¢ per cookie, will a small increase in price cause the total revenue to increase or decrease?
Decrease
O Increase
Chapter 2 Solutions
Microeconomics
Ch. 2 - Prob. 1DQCh. 2 - Prob. 2DQCh. 2 - Prob. 3DQCh. 2 - Prob. 4DQCh. 2 - Prob. 1PCh. 2 - Prob. 2PCh. 2 - Prob. 3PCh. 2 - Prob. 4PCh. 2 - Prob. 5PCh. 2 - Prob. 6P
Ch. 2 - Prob. 7PCh. 2 - Prob. 8PCh. 2 - Suppose the demand function for jelly beans in...Ch. 2 - Prob. 10PCh. 2 - Prob. 11PCh. 2 - Suppose the annual demand function for the Honda...Ch. 2 - Prob. 13PCh. 2 - The demand function for a product is Qd = 100 ...Ch. 2 - Prob. 2CPCh. 2 - Prob. 3CPCh. 2 - Prob. 4CPCh. 2 - Suppose that the demand function for jelly beans...
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- If own-price elasticity of demand equals 0.3 in absolute value, then what percentagechange in price will result in a 6% decrease in quantity demanded?arrow_forwardThe demand for ceiling fans can be modeled as D(p) = 25.02(0.992) thousand ceiling fans where p is the price (in dollars) of a ceiling fan. (a) Locate the point of unit elasticity. (Round your answers to two decimal places.) The point of elasticity occurs when p = $ and D(p) = thousand ceiling fans. (b) For what prices is demand elastic? For what prices is demand inelastic? (Round your numerical answers to two decimal places.) Demand is inelastic for < p < Demand is elastic for p ? ✓arrow_forwardThe Dixie Chicken currently sells 3,000 burger platters per month for $7, and the own-price elasticity for this platter has been estimated to be - 1.3 . If Dixie Chicken raises prices by 70 cents, how many platters will be sold?arrow_forward
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- Suppose the demand for a product is given by QD=100-5P, where QD is quantity per year measured in kilogram and P is the price in AUD per kilogram. The supply curve for this product is given by QS=4P-8. b) Calculate the elasticity of demand and supply at the equilibrium price.arrow_forwardRecently, gas prices have soared across the capital region. When the average gas price rose from $3.60 a gallon to $4.40 a gallon, the region observed a slight decrease in consumption of gasoline from 600 million gallons per year to 590 million gallons per year.Based on this information, what would you estimate that the price elasticity of demand is for gasoline in the Capital region? (The answer could be negative or positive and is not necessarily a whole number).arrow_forwardSuppose the demand for a product is given by QD=100-5P, where QD is quantity per year measured in kilogram and P is the price in AUD per kilogram. The supply curve for this product is given by QS=4P-8. Calculate the elasticity of demand and supply at the equilibrium price.arrow_forward
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