Microeconomics
11th Edition
ISBN: 9781260507140
Author: David C. Colander
Publisher: McGraw Hill Education
expand_more
expand_more
format_list_bulleted
Videos
Question
Chapter 6, Problem 5IP
(a)
To determine
Determine the range of the estimates of the new quantity demanded.
(b)
To determine
Determine the hypothesis.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Interestingly, the demand in the car market experienced a decline at the same time.
i. What can you say about the cross-elasticity of demand between petrol and car markets?
XED = 0
1 > XED > 0
XED > 1
0> XED
Economists have estimated that the price elasticity of demand for taxis in Windhoek is 1.5. if the initial quantity demanded is 30000 taxis per week, and the price of taxis increases by 20%, what would be the resulting quantity demanded after the price? [Hint: start an arbitrary price (say 100), work out the new price from the information given and then calculate the unknown quantity from the standard midpoint formula]
The 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 ? ✓
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
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Similar questions
- The price elasticity of demand for personal computers is estimated to be 2.2. If the price of personal computers declines by 20 percent, what will be the expected percentage increase in the quantity of computers sold?arrow_forwardIf the elasticity of demand for hamburgers equals 21.5 and the quantity demanded equals 40,000, predict what will happen to the quantity demanded of hamburgers when the price increases by 10 percent. If the price falls by 5 percent, what will happen?arrow_forwardProve that price elasticity of demand is not the same as the slope of a demand curve.arrow_forward
- helparrow_forwardThe table below provides some estimates of elasticities studied in this course. Use them to answer the questions that follow. Type of Elasticity Estimate Price elasticity of demand for cigarettes -0.25 Price elasticity of supply for cigarettes 0.90 Income elasticity of demand for cigarettes -0.2 Cross-price elasticity of demand for cigarettes and alcohol 0.30 Which of the following is correct (based on the elasticity estimates above) a. Cigarettes are a complement for alcohol b. Cigarettes are a substitute for alcohol c. Cigarettes are a giffen good d. Cigarettes are a normal goodarrow_forwardSuppose the elasticity of demand for used cars is estimated to be 3. What does this mean? What will be the effect on the quantity demanded for used cars if the price rises by 10 Percent? Suppose a university raises its tuition from $3,000 to $3,500. As a result, student enrollment falls from falls from 5,000 to 4,500. Calculate the price elasticity of demand. Is demand elastic, unitary elastic, or inelastic? Suppose the movie theater raises the price of popcorn 10 percent, but customers do not buy any less of it. What does this tell you about the price elasticity of demand, and what will happen to total revenue as a result of the price increase? Suppose the income elasticity of demand for furniture is 3 and the income elasticity of demand for physician services is 0.3. Compare the impact on furniture and physician services of a recession that reduces consumer income by 10%. Opponents of increasing the tax on gasoline argue that the big oil companies just pass the tax…arrow_forward
- When tolls on the Dulles Airport Greenway were reduced from $1.25 to $1.05, traffic increased from 15,000 to 20,000 trips a day. Assuming all changes in quantity were due to the change in price, what is the price elasticity of demand for the Dulles Airport Greenway?arrow_forwardThe figure to the right illustrates the demand for taxi rides in a large city. Suppose the price per ride is initially $35 but then falls to $25 due to a recession. What is the price elasticity of demand for taxi rides? Using the midpoint formula, the price elasticity of demand is. (Enter your response rounded to two decimal places.) Demand is unit-elastic inelastic elastic C Price (dollars per taxi ride) 60- 55- 50- 45- 40- 35- 30- 25- 20- 15- 10- 5- 0+ 0 A B D 40,000 80,000 120,000 160,000 200,000 240, Quantity (taxi rides per day)arrow_forwardThe formula for price elasticity of demand almost looks an average rate of change, the change in demand for a change in price, except that we're using percent change. With average rate of change, the order of the two points doesn't matter, as long as it is consistent. But with percent change, the order of points can matter, because we divide the change by the original quantity. For example, we looked at changes from 50 to 75 cents, so we divided by 50 cents. If we want to consider a price reduction from 75 cents to 50 cents, we would divide by 75 cents. Would the price elasticity of demand be the same? That's what you'll explore now. The formula would change to: (а — 2) / (p1 — рә) 92 P2 Using the two data points here, compute elasticity for Boston using the formula relative to the second point. Round your answer to the nearest hundredth. Boston Subway Fare Annual Ridership (in millions) Year 1980 0.50 158 1981 0.75 143arrow_forward
- If the price elasticity of supply is 2, and a price decrease led to a 16% decrease in quantity supplied, then by how much the price is decreased?arrow_forwardFor each statement below, tell whether the statement is valid or invalid, and give a short explanation of your answer. Remember that your explanation will be related in some way to elasticity. 1. Coffee and tea should have a positive cross elasticity of demand. 2. Demand for Tide will be more elastic than demand for laundry detergents as a whole. 3. The government will prefer to put excise taxes on jewelry rather than on gasoline.arrow_forwardSuppose that legalizing the use of marijuana would decrease its price by 92 percent. If the price elasticity of demand for marijuana is -2.75, what would be the percentage increase in the quantity of marijuana demanded from legalizing marijuana? percent. (Enter a numeric response using a real number rounded to two decimal places.) Suppose instead that the price elasticity of demand for marijuana is -0.17. What would be the percentage increase in the quantity of marijuana demanded from legalizing marijuana? decimal places). percent (enter your response rounded to two The higher the absolute value of the price elasticity of demand for marijuana, the V the increase in marijuana use that would result from legalization.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Exploring EconomicsEconomicsISBN:9781544336329Author:Robert L. SextonPublisher:SAGE Publications, Inc
Economics Today and Tomorrow, Student EditionEconomicsISBN:9780078747663Author:McGraw-HillPublisher:Glencoe/McGraw-Hill School Pub Co
Managerial Economics: Applications, Strategies an...EconomicsISBN:9781305506381Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. HarrisPublisher:Cengage Learning
Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning
Exploring Economics
Economics
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:SAGE Publications, Inc
Economics Today and Tomorrow, Student Edition
Economics
ISBN:9780078747663
Author:McGraw-Hill
Publisher:Glencoe/McGraw-Hill School Pub Co
Managerial Economics: Applications, Strategies an...
Economics
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
The CASH FLOW STATEMENT for BEGINNERS; Author: Accounting Stuff;https://www.youtube.com/watch?v=DiVPAjgmnj0;License: Standard Youtube License