Principles of Microeconomics
8th Edition
ISBN: 9781337676670
Author: N. Gregory Mankiw
Publisher: Cengage Learning US
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Question
Chapter 4, Problem 2QR
To determine
Demand curve and demand schedule and their relation.
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Students have asked these similar questions
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 4 Solutions
Principles of Microeconomics
Ch. 4.1 - Prob. 1QQCh. 4.2 - Prob. 2QQCh. 4.3 - Prob. 3QQCh. 4.4 - Prob. 4QQCh. 4 - Prob. 1CQQCh. 4 - Prob. 2CQQCh. 4 - Prob. 3CQQCh. 4 - Prob. 4CQQCh. 4 - Prob. 5CQQCh. 4 - Prob. 6CQQ
Ch. 4 - Prob. 1QRCh. 4 - Prob. 2QRCh. 4 - Prob. 3QRCh. 4 - Prob. 4QRCh. 4 - Prob. 5QRCh. 4 - Prob. 6QRCh. 4 - Prob. 7QRCh. 4 - Prob. 8QRCh. 4 - Prob. 9QRCh. 4 - Prob. 1PACh. 4 - Prob. 2PACh. 4 - Consider the market for minivans. For each of the...Ch. 4 - Prob. 4PACh. 4 - Prob. 5PACh. 4 - Prob. 6PACh. 4 - Prob. 7PACh. 4 - Prob. 8PACh. 4 - Prob. 9PACh. 4 - Prob. 10PACh. 4 - Prob. 11PA
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