1) Walkers’ Shoes reports the following demand schedule for its black brogues. Price 1600 800 400 200 100 50 25 12.5 Quantity demanded 2 4 8 16 32 64 128 256 a) For an increase in price from 50 to 100, calculate: i) The proportional change in price. ii) The proportional change in quantity demanded. iii) The price elasticity of demand for Walkers’ black brogues.
1) Walkers’ Shoes reports the following
Quantity demanded 2 4 8 16 32 64 128 256
a) For an increase in price from 50 to 100, calculate:
i) The proportional change in price.
ii) The proportional change in quantity demanded.
iii) The
b) Considering the demand schedule in the table, what do you conclude about the value of the price elasticity of demand for Walkers’ black brogues at every level of output? How would you classify the demand for such a good?
c) What is the effect on Walkers Shoes’ total revenue of doubling the quantity of shoes which it supplies? What is the value of its marginal revenue? How does your answer relate to the value of the price elasticity of demand?
d) The income elasticity of demand for Walkers’ Shoes is estimated to be 1.8. By how what percentage do you expect demand to increase if its customers’ incomes increase from 31,500 to 38,500?
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