EBK PRINCIPLES OF MICROECONOMICS
12th Edition
ISBN: 9780134069180
Author: Oster
Publisher: YUZU
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Chapter 5, Problem 5.1P
World famous Burpee Beer is brewed in the small town of West Burpee. Currently, the town of West Burpee levies a $2 per-case tax on all Burpee Beer, and the brewery sells 20,000 cases a year at a total
- a. How many total cases of beer would need to be produced to increase tax revenue by exactly $20,000?
- b. What is the
price elasticity of demand for Burpee Beer if the tax revenue increases by exactly $20,000? - c. How much total revenue will Burpee Beer receive if the tax revenue increases by exactly $20,000?
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Harding Enterprises has developed a new product called the “Quest Simulator (QS)”. The market demand for this product is given as follows: Q = 240 - 4P.
If QS is priced at $40, what is the point price elasticity of demand? Is demand elastic or inelastic?
What is the maximum amount that consumers are willing to pay for the quantity demanded at the price of $40? (hint: it includes both the total expenditures and the consumer surplus)
If the price of QS is increased slightly from $40, what will happen to the total expenditure on the product? What will happen to the consumer surplus?
Note:-
Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.
Answer completely.
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Chapter 5 Solutions
EBK PRINCIPLES OF MICROECONOMICS
Ch. 5 - Prob. 1.1PCh. 5 - Prob. 2.1PCh. 5 - Prob. 2.2PCh. 5 - Using the midpoint formula, calculate elasticity...Ch. 5 - A sporting goods store has estimated the demand...Ch. 5 - For each of the following scenarios, decide...Ch. 5 - For the following statements, decide whether you...Ch. 5 - Taxicab fares in most cities are regulated....Ch. 5 - Studies have fixed the short-run price elasticity...Ch. 5 - Prob. 2.9P
Ch. 5 - Prob. 2.10PCh. 5 - Prob. 2.11PCh. 5 - [Related to the Economics in Practice on p. 99] At...Ch. 5 - Prob. 3.2PCh. 5 - Prob. 4.1PCh. 5 - Prob. 4.2PCh. 5 - The cross-price elasticity values for three sets...Ch. 5 - Prob. 4.4PCh. 5 - World famous Burpee Beer is brewed in the small...Ch. 5 - Prob. 5.2P
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