Microeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN: 9781305506893
Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher: Cengage Learning
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Textbook Question
Chapter 7, 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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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
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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
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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.
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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:
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130
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10
8
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Microeconomics: Private and Public Choice (MindTap Course List)
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