5. Given the demand for a product as Qd = 100 – 5p and the supply as Qs = -20 + 3p, you are told equilibrium is obtained at the point where Qd = Qs. The equilibrium price for the product is a) R5 b) R6.67 c) R15 d) R20 6. You are given the following information about demand for potatoes Price per kg Quantity demanded (kg) R30 1 000 R32 850 Using the midpoint method, calculate the price elasticity of demand for the R30 to R32 price range. The price elasticity pf demand for potatoes is a) 0.26 b) 1.00 c) 2.25 d) 2.51 7. If bread and butter are complements in consumptions, which of the following could be the cross price elasticity of demand for bread and butter? a) -1 b) c) +1 d) +2

5. Given the demand for a product as Qd = 100 – 5p and the supply as Qs = -20 + 3p, you are told equilibrium is obtained at the point where Qd = Qs. The equilibrium price for the product is a) R5 b) R6.67 c) R15 d) R20 6. You are given the following information about demand for potatoes Price per kg Quantity demanded (kg) R30 1 000 R32 850 Using the midpoint method, calculate the price elasticity of demand for the R30 to R32 price range. The price elasticity pf demand for potatoes is a) 0.26 b) 1.00 c) 2.25 d) 2.51 7. If bread and butter are complements in consumptions, which of the following could be the cross price elasticity of demand for bread and butter? a) -1 b) c) +1 d) +2

Principles of Microeconomics (MindTap Course List)

8th Edition

ISBN:9781305971493

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter4: The Market Forces Of Supply And Demand

Section: Chapter Questions

Problem 6CQQ

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Similar questions

(Calculating Price Elasticity of Demand) Suppose that 50 units of a good are demanded at a price of Si per unit. A reduction in price to $0.20 results in an increase in quantity demanded to 70 units. Using the midpoint formula, show that these data yield a price elasticity of 0.25. By what percentage would a 10 percent rise in the price reduce the quantity demanded, assuming price elasticity remains constant along the demand curve?
For each of the determinants of demand in Equation 2.1, identify an example illustrating the effect on the demand for hybrid gasoline-electric vehicles such as the Toyota Prius. Then do the same for each of the determinants of supply in Equation 2.2. In each instance, would equilibrium market price increase or decrease? Consider substitutes such as plug-in hybrids, the Nissan Leaf and Chevy Volt, and complements such as gasoline and lithium ion laptop computer batteries.
Estimates presented in Exhibit 5 show that Android users have a higher price elasticity of demand for apps in the Google Play Store than do iPhone users in the Apple App Store. Why might Android users tend to be more sensitive to app prices than iPhone users? What categories or types of apps (for example, games/social media) do you think have the highest price elasticities?
Suppose you learned that the price elasticity of demand for wheat is 0.7 between the current price for wheat and a price 2 higher per bushel. Do you think that farmers collectively would try to reduce the supply of wheat and drive the price up 2 higher per bushel? Explain your answer. Assuming that they would try to reduce supply, what problems might they have in actually doing so?
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