# ADVANCED ANALYSIS Currently, at a price of \$1 each, 100 popsicles are sold per day in theperpetually hot town of Rostin. Consider the elasticity of supply. In the short run, a price increasefrom \$1 to \$2 is unit-elastic (Es 1.0). In the long run, a price increase from \$1 to \$2 has anelasticity of supply of 1.50. (Hint: Apply the midpoints approach to the elasticity of supply.)Instructions: Enter your answers as whole numbers.a. How many popsicles will be sold each day in the short run if the price rises to \$2 each?per dayb. How many popsicles will be sold per day in the long run if the price rises to \$2 each?per day Explain why the choice between 1, 2, 3, 4, 5, 6,7, and 8 "units," or 1,000, 2,000, 3,000, 4,000, 5,000, 6,000, 7,000, and 8,000 movie tickets, makes nodifference in determining elasticity in the table below.Total QuantityofElasticityCoefficientTickets Demandedper WeekPriceTotal-TotalRevenueper(Ed)ThousandsTicketRevenueTest1Elastic\$85.00\$8,000272.6014,000Elastic31.5718,000ElasticUnit451.0020,000elastic20,000540.64Inelastic30.3818,000Inelastic6720.2014,000Inelastic10.008,000Inelastic

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624 views help_outlineImage TranscriptioncloseADVANCED ANALYSIS Currently, at a price of \$1 each, 100 popsicles are sold per day in the perpetually hot town of Rostin. Consider the elasticity of supply. In the short run, a price increase from \$1 to \$2 is unit-elastic (Es 1.0). In the long run, a price increase from \$1 to \$2 has an elasticity of supply of 1.50. (Hint: Apply the midpoints approach to the elasticity of supply.) Instructions: Enter your answers as whole numbers. a. How many popsicles will be sold each day in the short run if the price rises to \$2 each? per day b. How many popsicles will be sold per day in the long run if the price rises to \$2 each? per day fullscreen help_outlineImage TranscriptioncloseExplain why the choice between 1, 2, 3, 4, 5, 6,7, and 8 "units," or 1,000, 2,000, 3,000, 4,000, 5,000, 6,000, 7,000, and 8,000 movie tickets, makes no difference in determining elasticity in the table below. Total Quantity of Elasticity Coefficient Tickets Demanded per Week Price Total- Total Revenue per (Ed) Thousands Ticket Revenue Test 1 Elastic \$8 5.00 \$8,000 2 7 2.60 14,000 Elastic 3 1.57 18,000 Elastic Unit 4 5 1.00 20,000 elastic 20,000 5 4 0.64 Inelastic 3 0.38 18,000 Inelastic 6 7 2 0.20 14,000 Inelastic 1 0.00 8,000 Inelastic fullscreen
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a.

it is given that the price increases from \$1 to \$2 and the elasticity is unit elastic means that the elasticity of demand will be 1. The initial quantity demanded at price of \$1 is 100. Let consider the quantity demanded at price of \$2 be x. The value of X can be calculated using the mid-point approach as follows: help_outlineImage TranscriptionclosePi+P.) до (Q*%) ДР Ed (1+2) 1= (X-100) (100+X) (2-1) 3 X-100 1= 100 X 1 100 X 3X-300 100 300 3X-X 400 2X Х 400 2 = 200 fullscreen
Step 2

Thus, the quantity demanded is 200 at the short run price of \$2 each.

b.

Here, the change in price from \$1 to \$2 has a elasticity of 1.5. The quant... help_outlineImage TranscriptioncloseE d ( 2 AP 1.5 1+2)y-100) (100 y (2-1) у -100 1.5 100 y 1 150 1.5y 3y-300 150+300 3y-1.5y 450 1.5y 450 у3 1.5 = 300 fullscreen

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