Microeconomics
10th Edition
ISBN: 9781259655500
Author: David C Colander
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Question
Chapter 6, Problem 18QE
(a)
To determine
The cross-
(b)
To determine
Identify whether the goods are complements and substitutes.
(c)
To determine
Identify the impact on demand if the goods are substitutes.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Mel needs your help in understanding the following problem. The price of lettuce has increased slightly from R4.00 to R5.00, causing a fall in the quantities demanded from 100 to 80 per month. However, she also noticed a decrease in the demand for tomatoes, from 150kg to 120kg, even though no price changes have occurred. Can you help her understand this behaviour by seeing if a relationship possibly exists between these two goods?
[Hint: Use the elasticity coefficient as a tool for your recommendation. Show all workings. Round your answer to 4 decimal points.]
Consider the demand for shrimp shown in Figure 2. Suppose the current demand for shrimp is D (in black), the current price of a pound of shrimp is $10, and the current quantity demand of shrimp is 200K. Which of the following correctly describes an increase in the demand for shrimp, assuming the price of a pound of shrimp remains at $10?
A) The demand curve for shrimp shifts right from D to D' (blue), and the quantity demand for shrimp decreases from 200K pounds to 150K pounds.
B) The demand curve for shrimp shifts left from D to D'' (red), and the quantity demand for shrimp decreases from 200K pounds to 150K pounds.
C) The demand curve for shrimp shifts right from D to D' (blue), and the quantity demand for shrimp increases from 200K pounds to 270K pounds.
D) The demand curve for shrimp shifts left from D to D'' (red), and the quantity demand for shrimp increases from 200K pounds to 270K pounds.
Please answer ASAP will upvote, thanks!
Chapter 6 Solutions
Microeconomics
Ch. 6.1 - If when price rises by 4 percent, quantity...Ch. 6.1 - Prob. 2QCh. 6.1 - Prob. 3QCh. 6.1 - Prob. 4QCh. 6.1 - Prob. 5QCh. 6.1 - Prob. 6QCh. 6.1 - Prob. 7QCh. 6.1 - Prob. 8QCh. 6.1 - Prob. 9QCh. 6.1 - Prob. 10Q
Ch. 6 - Determine the price elasticity of demand if, in...Ch. 6 - A firm has just increased its price by 5 percent...Ch. 6 - When tolls on the Dulles Airport Greenway were...Ch. 6 - Prob. 4QECh. 6 - Prob. 5QECh. 6 - Prob. 6QECh. 6 - Prob. 7QECh. 6 - Economists have estimated the following...Ch. 6 - Prob. 9QECh. 6 - A newspaper recently lowered its price from 5.00...Ch. 6 - Once a book has been written, would an author...Ch. 6 - Prob. 12QECh. 6 - Prob. 13QECh. 6 - Suppose average movie ticket prices are 8.50 and...Ch. 6 - Which of the following producers would you expect...Ch. 6 - Prob. 16QECh. 6 - Prob. 17QECh. 6 - Prob. 18QECh. 6 - Prob. 19QECh. 6 - Prob. 20QECh. 6 - Prob. 21QECh. 6 - Prob. 22QECh. 6 - Prob. 1QAPCh. 6 - Prob. 2QAPCh. 6 - Prob. 3QAPCh. 6 - Prob. 4QAPCh. 6 - Prob. 5QAPCh. 6 - Price elasticity is not just a technical economic...Ch. 6 - Prob. 1IPCh. 6 - Prob. 2IPCh. 6 - Prob. 3IPCh. 6 - Prob. 4IPCh. 6 - Prob. 5IPCh. 6 - In 2004, Congress allocated over 20 billion to...Ch. 6 - In 2004, (Congress allocated over 20 billion to...Ch. 6 - Prob. 8IPCh. 6 - Prob. 9IPCh. 6 - Prob. 10IP
Knowledge Booster
Similar questions
- are products that are usually consumed together and for which an increase in the price of one good reduces the demand for another good. [ 4.4.2 Cross-Price Elasticity of Demand] A) Complements Inferior goods Substitutes D) Normal goodsarrow_forwardSuppose the price of salt increases by 25 percent and, as a result, the quantity of pepper demanded (holding the price of pepper constant) increases by 3 percent. The cross-price elasticity of demand between salt and pepper is || (Enter your response rounded to two decim places and include a minus sign if appropriate.) In this example, salt and pepper are Instead, suppose salt and pepper were complements. If so, then the cross-price elasticity of demand between salt and pepper would be A. positive. B. negative. C. zero. D. greater than 1. E. less than – 1.arrow_forwardConsider the demand for shrimp shown in Figure 2. Suppose the current demand for shrimp is D (in black), the current price of a pound of shrimp is $10, and the current quantity demand for shrimp is 200K. Which of the following correctly describes the effect of an increase in the price of a pound of shrimp? A) The price of a pound of shrimp rises to $15, the demand curve shifts left to D'' (red), and the quantity demand for shrimp remains at 200K pounds. B) The price of a pound of shrimp rises to $15, the demand curve remains at D (black), and the quantity demand for shrimp decreases to 150K pounds. C) The price of a pound of shrimp rises to $15, the demand curve shifts right to D' (blue), and the quantity demand for shrimp increases to 270K pounds. D) The price of a pound of shrimp rises to $15, the demand curve remains at D (black), and the quantity demand for shrimp increases to 270K.arrow_forward
- You run a shop that sells everything connected with coffee. Currently, you sell 21 coffee makers per month, but you would like to increase this to 55. Knowing that coffee makers and coffee beans are complements, you have decided to stimulate demand for coffee makers by decreasing the price of coffee beans. Given that you achieved your sales target for coffee makers by reducing the price of coffee beans from $1.10 to $0.89, what is the cross-price elasticity of demand between the two goods? Use the midpoint method, and round all intermediate calculations and your final answer to two decimal places if necessary.arrow_forwardWhy is the cross-price elasticity of demand positive for substitutes? [arrow_forwardSuppose the own-price elasticity of demand for beef is -0.8 and the own-price elasticity of supply of beef is 0.9. Due to a newly introduced government policy, beef supply increases by 2% with no change in the demand for beef. Assuming that the current price for beef is 40/cwt and the quantity bought and sold is 2,000 cwt per day, find the new equilibrium price and quantity of beef (round your answers to two decimal places).arrow_forward
- Asaparrow_forwardIn the following questions, give all your answers to two decimals. Patrice works as an economist for the Bureau of Labor Statistics (BLS). Her current project is to estimate the effect of changes in income, prices of related goods, and the price of potatoes on the demand for beef. Patrice has the following data: Price elasticity of demand for beef -0.80 Income elasticity of demand for beef + 1.40 Cross-price elasticity between beef and chicken +1.20 Cross-price elasticity between beef and potatoes -0.50arrow_forwardGood X becomes cheaper to produce, decreasing its price. As a result, the demand for good Y increases. What can you say about the cross-price elasticity between the two goods? Moreover, discuss whether the two goods are substitutes, complements or neither.arrow_forward
- Can someone help me with the equation to answer this problem? Imagine you are an economist for the Commerce Department. Buffalo meat has less fat and more protein than beef. There are a number of people for whom beef is not a substitute. For health reasons, they eat only buffalo meat. As a result, the elasticity of demand for buffalo meat is -.75. Because it is profitable, more firms have gone into the business of raising buffalo. As a result, the supply of buffalo meat is 21% higher this year than last. What will be the % change in the price of buffalo meat and what will be the % change in revenues going to those who raise buffaloes?arrow_forwardQ22arrow_forwardRalph consumes apples (A) and bananas (B). His Marshallian demand for bananas is 10.5 p0.2 6p0:7 B* = (a) Find and interpret the income elasticity of demand for bananas (eğ,1) and interpret the value. Are bananas an inferior or normal good? (b) Find the own price elasticity of demand for bananas (¤Â‚Ãß) and interpret the value. Does the own price elasticity of demand for bananas depend on the value of PB? (c) Find the cross price elasticity of demand for bananas (е‚Ã) and interpret the value. Are bananas and apples gross substitutes or gross complements?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Microeconomics: Private and Public Choice (MindTa...EconomicsISBN:9781305506893Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
Macroeconomics: Private and Public Choice (MindTa...EconomicsISBN:9781305506756Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
Economics: Private and Public Choice (MindTap Cou...EconomicsISBN:9781305506725Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
Microeconomics: Private and Public Choice (MindTa...
Economics
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Macroeconomics: Private and Public Choice (MindTa...
Economics
ISBN:9781305506756
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Economics: Private and Public Choice (MindTap Cou...
Economics
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning