able 19-2 indicates that the short-run price elasticity of demand for tires is 0.9. If an increase in the price of petroleum (used in producing tires) causes the market prices of tires to rise from $50 to $60, by what percentage would you expect the quanity of tires demanded to change?
able 19-2 indicates that the short-run price elasticity of demand for tires is 0.9. If an increase in the price of petroleum (used in producing tires) causes the market prices of tires to rise from $50 to $60, by what percentage would you expect the quanity of tires demanded to change?
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter3: Demand Analysis
Section: Chapter Questions
Problem 8E: The Stopdecay Company sells an electric toothbrush for $25. Its sales have averaged 8,000 units per...
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Table 19-2 indicates that the short-run
Transcribed Image Text:TABLE 19-2
Price Elasticities of Demand
for Selected Goods
Estimated Elasticity
Here are estimated demand elasticities for
Category
Short Run
Long Run
selected goods. All of them are negative,
although we omit the minus sign. Estimates
of both short-run and long-run price elas-
ticities of demand are given where avail-
able. The long run is associated with the
time necessary for consumers to adjust fully
to any given price change. (Note: “N.A."
indicates that no estimate is available.)
Air travel (business)
0.4
1.2
Air travel (vacation)
1.1
2.7
Вeef
0.6
N.A.
Cheese
0.3
N.A.
Electricity
0.1
1.7
Fresh tomatoes
4.6
N.A.
Gasoline
0.2
0.5
Hospital services
0.1
0.7
Intercity bus service
0.6
2.2
Physician services
0.1
0.6
Private education
1.1
1.9
Restaurant meals
2.3
N.A.
Tires
0.9
1.2
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