a. Based on these demand elasticity estimates, which fruit is most inelastically demanded? Which is most elastically demanded? b. For which of these fruits would a 10% drop in price cause an increase in total revenue from that sale of that fruit? c. If the government could offer “10% off” coupons for only three of these fruits, and it wanted to have the biggest possible effect on quantity demanded, which three fruits should get the coupons? d. Overall, the authors found that for the average fruit, the elasticity of demand was about -0.5. Is the demand for fruit elastic or inelastic? apple: -0.16 banana: -0.42 grapefruit: -1.02 grapes: -0.91 oranges: -1.14
a. Based on these demand elasticity estimates, which fruit is most inelastically demanded? Which is most elastically demanded? b. For which of these fruits would a 10% drop in price cause an increase in total revenue from that sale of that fruit? c. If the government could offer “10% off” coupons for only three of these fruits, and it wanted to have the biggest possible effect on quantity demanded, which three fruits should get the coupons? d. Overall, the authors found that for the average fruit, the elasticity of demand was about -0.5. Is the demand for fruit elastic or inelastic? apple: -0.16 banana: -0.42 grapefruit: -1.02 grapes: -0.91 oranges: -1.14
Chapter6: Elasticities
Section: Chapter Questions
Problem 11P
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a. Based on these
b. For which of these fruits would a 10% drop in price cause an increase in total revenue from that sale of that fruit?
c. If the government could offer “10% off” coupons for only three of these fruits, and it wanted to have the biggest possible effect on quantity demanded, which three fruits should get the coupons?
d. Overall, the authors found that for the average fruit, the elasticity of demand was about -0.5. Is the demand for fruit elastic or inelastic?
apple: -0.16
banana: -0.42
grapefruit: -1.02
grapes: -0.91
oranges: -1.14
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