Answered: 4. Suppose that when the price rises by…

4. Suppose that when the price rises by 40% for a particular good, the quantity demanded of that good falls by 20%. What is the price elasticity of demand for this good?

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter5: Elastic And Its Application

Section: Chapter Questions

Problem 1QR

See similar textbooks

Related questions

Q: 4. Which of the following will NOT affect the price elasticity of demand for frozen peas? A The…

A: Elasticity of demand measures the responsiveness of change in quantity demanded to change in price…

Q: On Tuesday, the price and quantity demanded Rice are Tk50 and 120 Tones, respectively. Ten days…

A: Given That on Tuesday, the price and quantity demanded Rice are Tk50 and 120 Tones, respectively.…

Q: 1.Suppose the price of gasoline rises from $1.89 to 2.17 per gallon, and in response the quantity…

A: Here we calculate the followings terms by using the given information , so the calculation of the…

Q: 2) Suppose the quantity of Ülker biscuits demanded RISES by 10 % and the price elasticity of demand…

A: Demand is the willingness and ability of consumers for consuming and buying goods and services at…

Q: 33. If goods X and Y are COMPLEMENTS, the which of the following could be the value of cross price…

A: Complementary goods: It is good, which is utilized when related to another great or administration.…

Q: 1. Suppose the price of gasoline in July 2018 averaged $1.35 a gallon and 15 million gallons a…

A: Answer - Given in the questionPrice of gasoline in July 2008 averaged = $1.35 a gallonGasoline…

Q: 2. The demand for such products as salt, bread, and electricity tend to be: * O of unit price…

A: Demand is the willingness and ability of consumers for consuming and buying goods and services at…

Q: 2. Calculating the price elasticity of demand: A step-by-stepguide Suppose that during the past…

A: we have the original price (P)=2100 new price(P1)=1820 original quantity(Q)=429,000 new…

Q: Suppose that during the past year, the price of a laptop computer rose from $2,750 to $2,880. During…

A: The price elasticity of demand measures the responsiveness in the quantity demanded of a commodity…

Q: When the price of shirts emblazoned with a college logo is $20, consumers buy 150 shirts per week.…

A: Question 7 is incomplete so I will answer question 8. Given Price of shirt P1 =$20 then quantity…

Q: 3. Suppose Car company raises its price from 10 S to 30 and Suppose quantity demanded reduce from 80…

A: The Elasticity of demand = % change in the quantity demanded / % Change in the price.

Q: 32. What does price elasticity of demand measure? A. O Change in price caused by changes in demand…

A: The curve that depicts the quantities being demanded by consumers at various levels of price is…

Q: c When the price of bananas rises 2 percent, the quantity demanded of peanut butter falls 4 percent.…

A: The elasticity of demand is used to determine the relationship between two variables. The cross…

Q: If price of canned good in the grocery store increases by 8% and the quantity demanded decreases by…

A: Some goods' pricing are extremely inelastic, according to economists. That is, lowering the price…

Q: Assume that a retailer sells 1000 six-packs of Pepsi per day at a price of $3.25/six-pack. You as an…

A: Given Information-There are two goods Pepsi and Coca-Cola. The quantity sold of Pepsi is equal to…

Q: Assume that the price cross-elasticity of demand for cream with respect to the price of strawberries…

A: To determine how much demand for one commodity will change in response to a change in the price of…

Q: 2. Discuss determinants of price elasticity of demand?

A: Price elasticity of demand is the measure of% change in quantity demanded due to % change in own…

Q: Suppose that during the past year, the price of a laptop computer rose from $2,750 to $2,880. During…

A: Price Elasticity of demand refers to the responsiveness in quantity demanded due to change in price…

Q: 3. Let's do a quick calculation. If the price of good X increases by 10%, and the quantity demanded…

A: (Note: The student has asked to answer Question 3) The consumers, or buyers are those entities in…

Q: 1. If a 10% increase in price leads to a 40% decrease in quantity demanded, what is the value of…

A: Given: Percentage change in Price=10% Percentage change in the quantity Demanded= -40% Formula for…

Q: 1. If a 7 percent rise in the price of Pepsi increases the quantity of Coca Cola demanded by 4…

A: Cross Price Elasticity refers that when change in price of one product will affect the quantity of…

Q: Suppose that a 20% increase in the price of gasoline causes a 30% increase in the sale of Tesla cars…

A: Cross price elasticity refers that change in price of one good will affect or change in demand of…

Q: 3. Find the price elasticity of supply using the below table price Quantity 30 12 50 • Determine if…

A: The formula for calculating price elasticity of supply is given below. Price elasticity of…

Q: (4) Suppose the price elasticity of demand for a good is -0.2. If there is a 5% increase in the…

A: We have given that the price elasticity of demand is -0.2 The formula for price elasticity of…

Q: Question 7 The price elasticity of demand tells us how sensitive buyers are to a change in price. O…

A: Demand: - Demand is the relationship between the quantity demanded and the price of a good. There is…

Q: Due to the increase in the demand for video games, the equilibrium price of video games increases by…

A: When the equilibrium price of video games rises by 10%, equilibrium demanded also rises by 5% but…

Q: 1. What is the implication in pricing of a commodity of a good yielding a highly elastic “price…

A: Note: “Since you have asked multiple questions, we will solve the first question for you. If you…

Q: 16.) Suppose that a demand curve passes through the points (4,$4.00) and (8,$2.00). What is the…

A: Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: Assume that the price cross elasticity of demand for muffins with respect to the price of coffee is…

A: Elasticity of demand is defined as type responsiveness of the quantity demand when price of the…

Q: 4. The price elasticity of demand for bracelets is 2.1. How would you interpret this? a. When the…

A: The price elasticity of demand is an economic variable that measures the responsiveness of demand…

Q: Suppose we have the following information concerning the printed magazine and digital magazine…

Q: 4. a) Suppose the dermand schedule for CDs is as foliows: Price (S) QD of CDs 10 300 12 270…

Q: 4) Suppose that the cross price elasticity between goods A and B is -2.5, one may conclude that a 10…

A: Hi Student, Thanks for posting this question. As per the guideline we are providing answer for the…

Q: 3. Suppose that when the price of a candy bar increases by 20 percent, the quantity of candy bars…

A: Price elasticity of demand states that how much of the demand is influenced by how much change in…

Q: 3. Suppose that as the income level increases by 10% that the quantity demanded of that same item…

A: Income Elasticity is the responsiveness in quantity demanded to the change in income level . And…

Q: 10. Given the demand equation which is Qdx = 80 - Px + Py, and your solutions for Qdx at the old…

A: Elaticity fromula = %change in quntity/ %change in price.

Q: 1) If a good has a price elasticity of demand of -3, it implies that: 2) Which of the following…

A: 1)Price elasticity of demand: Price elasticity of demand measures the responsiveness of the change…

Q: 5. (а) The demand function for goods A is p = 20-0.2q, where p is price and q is quantity (i)…

A: The price and quantity demanded are the two components that are used to calculate the price…

Q: 4. Calculate the price elasticity of demand along the demand schedule below and indicate whether…

A: Price elasticity of demand is a measurement of the change in consumption of a product in relation to…

Q: For the first time in two years, Big G (the cereal division of General Mills) raised cereal prices…

A: Given the increase in price = 4% The decrease in the volume of cereal = 6 %

Question

4. Suppose that when the price rises by 40% for a particular good, the
quantity demanded of that good falls by 20%. What is the price
elasticity of demand for this good?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1.

VIEW

Step 2.

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

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

If a 10 decrease in the price of one product that you buy causes an 8 increase in quantity demanded of that product, will another 10 decrease in the price cause another 3 increase (no more and no less) in quantity demanded?
What is the price elasticity of demand? Can you explain it in your own words?
What is the relationship between price elasticity and position on the demand curve? For example, as you move up the demand curve to higher prices and lower quantities, what happens lo the measured elasticity? How would you explain that?
What is the formula for the income elasticity of demand?
Would you expect supply to play a more significant role in determining the price of a basic necessity like food or a luxury like perfume? Explain. Hint: Think about how the price elasticity of demand will differ between necessities and luxuries.
Suppose that your demand schedule for DVDs is as follows: Price Quantity Demanded (income = 10,000) Quantity Demanded (income = 12,000) 8 40 DVDs 50 DVDs 10 32 45 12 24 30 14 16 20 16 8 12 a. Use the midpoint method to calculate your price elasticity of demand as the price of DVDs increases from 8 to 10 if (i) your income is 10,000 and (ii) your income is 12,000. b. Calculate your income elasticity of demand as your income increases from 10,000 to 12,000 if (i) the price is 12 and (ii) the price is 16.
A price change causes the quantity demanded of a good to decrease by 30 percent, while the total revenue of that good increases by 15 percent. Is the demand curve elastic or inelastic? Explain.
Economists define normal goods as having a positive income elasticity. We can divide normal goods into two types: Those whose income elasticity is less than one and those whose income elasticity is greater than one. Think about products that would fall into each category. Can you come up with a name for each category?
What is the formula for line cross-price elasticity of demand?