Q5 The government of a small country is considering theintroduction of a unit subsidy on the production of organicmeat as its consumption has been proved to have healthbenefits. The effect following the introduction of the tax isshown in the graph below.Price per pound of organic meat£28S1£24£20£17DQuantity of pounds oforganic meat8,20010,50022,000 5. Stagecoachsells 86000Guildford day ticketsevery monthat a price of £8. The price elasticity of demand of daytickets is estimated in -0.7. Stagecoach is consideringincreasing the day tickets price from £8 to £10.Calculate how this change in price will affect thedemand. Provide your answer as percentage change.You are required to show your workings and explainyour answer ·

Given; Demand for tickets per month= 86000 Price of ticket= £8 Price elasticity of demand= -0.7 New…

5. Stagecoachsells 86000Guildford day ticketsevery month at a price of £8. The price elasticity of demand of day tickets is estimated in -0.7. Stagecoach is considering increasing the day tickets price from £8 to £10. Calculate how this change in price will affect the demand. Provide your answer as percentage change. You are required to show your workings and explain your answer

5. Stagecoachsells 86000Guildford day ticketsevery month at a price of £8. The price elasticity of demand of day tickets is estimated in -0.7. Stagecoach is considering increasing the day tickets price from £8 to £10. Calculate how this change in price will affect the demand. Provide your answer as percentage change. You are required to show your workings and explain your answer

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter6: Elasticities

Section: Chapter Questions

Problem 6P: Explain why using the midpoint formula for calculating the elasticity of demand gives the same...

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