Economics: Private and Public Choice
16th Edition
ISBN: 9781337642224
Author: James D. Gwartney; Richard L. Stroup; Russell S. Sobel
Publisher: Cengage Learning US
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Textbook Question
Chapter 20, Problem 12CQ
Jill’s Sausage Dog Stand projects the following
- a. Calculate the
price elasticity of demand between $2 and $4. Is demand in this range elastic or inelastic? - b. Calculate the price elasticity of demand between $4 and $6. Is demand in this range elastic or inelastic?
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Students have asked these similar questions
Suppose the accompanying table contains data on how many Veggie Delite sandwiches Subway is willing to sell each day at two different prices. Calculate the daily price elasticity of supply when the price increases from $5.00 to $7.50. Please round to the nearest hundredth.
Price(per sandwich)
Quantity supplied(sandwiches per day)
$5.00
200,000
$7.50
210,000
a. Daily price elasticity of supply for Veggie Delite sandwiches =
b. The daily price elasticity of supply for Veggie Delite sandwiches is relatively Elastic or Inelastic
Now consider how responsive Subway’s supply of Veggie Delite sandwiches is to changes in price on an annual basis instead of a daily basis.
c. Compared to the daily value, the annual price elasticity of supply for Veggie Delite sandwiches is likely to be more Inelastic or Elastic and the annual supply curve is likely Flatter or Steeper to be than the daily supply curve.
'If the two points on the demand for
Norman's rooms lie on a straight-line demand curve, what then is the point price elasticity of demand
at a nightly price of $150? Please show your work and report your answer to one decimal place.
Suppose Norman Bates, the owner-manager of a small local hotel, projects the
following demand for his rooms:
Price
$110
130
Quantity purchased (per night)
10
8
What does the price elasticity of supply for a theme park look like?
Chapter 20 Solutions
Economics: Private and Public Choice
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- Suppose that when price is 10, quantity supplied is 20 units, and when the price is 6, the quantity supplied is 12 units. What is the price elasticity of supply? a. 0.5 b. 0.8 c. 1.0 d. 1.5arrow_forwardIf the midpoint on a straight-line demand curve is at a price of $7, what can we say about the elasticity of demand for a price change from $12 to $10? What about from $6 to $4?arrow_forwardSuppose Erin, the owner-manager of a local hotel projects the following demand for her rooms: a. Calculate the price elasticity of demand between 90 and 110. b. Is the price elasticity of demand between 90 and 110 elastic, unit elastic, or inelastic? c. Will Erins total revenue rise if she increases the price from 90 to 110? d. Calculate the price elasticity of demand between 110 and 130. e. Is the price elasticity of demand between 110 and 130 elastic, unit elastic, or inelastic? f. Will Erins total revenue rise if she increases the price from 110 to 130?arrow_forward
- Evaluate the following statement: Along a downward-sloping linear demand curve, the slope and therefore the elasticity of demand are both 'constant.arrow_forwardProve that price elasticity of demand is not the same as the slope of a demand curve.arrow_forwardIn the demand curve, there is a mid-point. Determine the value of: i. Elasticity of demand in the mid-point ii. Elasticity of demand above the mid-point iii. Elasticity of demand below the mid-pointarrow_forward
- The table above gives the demand schedule for Maritime Museum in Beşiktaş. How does the price elasticity of demand change if you move along the demand schedule from $10 to $8 to $6 ultimately to $4. What does this tell us?arrow_forwardTwo drivers-Yakov and Ana-each drive up to a gas station. Before looking at the price, each places an order. Yakov says, "I'd like 5 gallons of gas." Ana says, "I'd like $20 worth of gas." Which of the following statements is correct? Check all that apply. Ana's price elasticity of demand is greater than 1. Yakov's price elasticity of demand is 1. Yakov's price elasticity of demand is between 0 and 1. Yakov's price elasticity of demand is 0.arrow_forwardPrice elasticity of demand. Discuss the major determinants of price elasticity of demand. With these determinants in mind, take a moment to see if you can figure out which of the following products have elastic demand and which have inelastic demand. and explain Gasoline College textbooks Coffee Airline tickets Concert tickets Soft drinks Medical proceduresarrow_forward
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