Please write the attached text in handwriting. Thanks Hala Haj HamadPrice 1=10Quantity 1= 100 unitsPrice 2: 20P1=10,P2=20Quantity 2: 120 unitsThe elasticity of supply: [Change in Qs/Change in Price][Initial P/Initial Qs]Percent change in price=P2-P1/P1*100100=100*10/10=100*20-10/10Q1=100,Q2=120Percent change in quantity supplied=Q2-Q1/Q1*10020=100*20/100=100*120-100/100=Elasticity of supply=percent change in quantity supplied/percent changein price0.2=20/100=Supply is inelastic,because elasticity of supply is less than 1.

The %change in Qs to %change in P calculated by es. It can be 1, less than 1 or more than 1 depicts…

Answered: elasticity of supply:

Business

Economics

elasticity of supply:

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter5: Elastic And Its Application

Section: Chapter Questions

Problem 10PA

See similar textbooks

Similar questions

The estimated monthly sales of Mona Lisa paint-by-number sets is given by the formula q = 95ep − 3p2⁄2, where q is the demand in monthly sales and p is the retail price in hundreds of yen. (a)Determine the price elasticity of demand E when the retail price is set at ¥300. E = Interpret your answer. The demand is going by % per 1% increase in price at that price level. Thus, a large price ___ is advised. (b)At what price will revenue be a maximum? (Round your answer to the nearest integer.) yen (c)Approximately how many paint-by-number sets will be sold per month at the price in part (b)? (Round your answer to the nearest integer.) paint-by-number sets per month
P & A Ch 05 Q10 Consider public policy aimed at smoking. Studies indicate that the price elasticity of demand for cigarettes is about 0.2. If a pack of cigarettes currently costs $5 and the government wants to reduce smoking by 10%, it should increase the price by ? %. If the government permanently increases the price of cigarettes, the effect on smoking 1 year from now will be ( larger / smaller ) than the effect 3 months from now. Studies also find that teenagers have a higher price elasticity of demand than do adults. Which of the following statements are consistent with this result? Check all that apply. Adults are more likely to be addicted to cigarettes. Teenagers do not have as much income as adults, so they are more price sensitive. It is legal for adults to consume alcohol, so many choose to spend their money on that good rather than cigarettes.
Transport operators in Belize received permission to increase their fares 15percent, and they anticipated that revenues would increase by about 15percent. When the 15 percent increase was enacted revenues increased by only about 5 percent. What can you infer about the elasticity of demand for transportation? What were operators assuming about the elasticity of demand
The estimated monthly sales of Mona Lisa paint-by-number sets is given by the formula q = 95e−3p2 + p, where q is the demand in monthly sales and p is the retail price in hundreds of yen. (a) Determine the price elasticity of demand E when the retail price is set at ¥400. E = _____ Interpret your answer. The demand is going down/up by ____ % per 1% increase in price at that price level. Thus, a large price decrease/increase is advised. (b) At what price will revenue be a maximum? ____ hundred yen (c) Approximately how many paint-by-number sets will be sold per month at the price in part (b)? (Round your answer to the nearest integer.) ______ paint-by-number sets per month
Consider a public policy aimed at smoking. The government commissioned a research firm, Super Consulting, to conduct a study on the market demand for cigarettes in Malaysia. The firm reported that the price elasticity of demand for cigarettes is about 0.4. If a pack of cigarettes costs $2 and the government wants to reduce smoking by 20 percent, by how much should it increase the price? If the government permanently increases the price of cigarettes, will the policy have a larger effect on smoking after 1 year from now or 5 years from now? Explain Super Consulting also found that teenagers have higher price elasticity than adults. Why might this be true? Explain Outline and discuss the appropriate economic policies that can be implemented to reduce smoking.
Demand for Nuts is given by Q = 50 – 2P. (Not that dQ/Dp= - 2) 1)Calculate the price elasticity of demand. 2)At what price-quantity combination is revenue from sales of nuts maximized? Why? Show your mathematical work. Illustrate by graphing total revenue. 3) A report published in Science magazine shows that eating nuts is correlated with high levels of blood cholesterol. How would this affect the demand for nuts? The revenue maximizing amount of nuts?
Consider public policy aimed at smoking:a) Studies indicate that the price elasticity of demand for cigarettes is about 0.4. Ifpack of cigarettes currently costs $2 and the government wants to reduce smokingby 20 per cent, by how much should it increase the price?b) If the government permanently increases the price of cigarettes, will the policyhave a larger effect on smoking one year from now or five years from now? Why?
Question a) Demand for Magnum Ice Cream is given by an equation as Q = 70 – 10P + 4 Px + 50 I Where, Q = Quantity of Magnum demanded, P = Price of Magnum Ice Cream, Px = Price of Walls Ice Cream, I = Per Capita Income Assume P = Rs 100, Px = Rs 120 and I = Rs 25 (Rs in thousands). Calculate Price Elasticity of Demand Cross Price Elasticity of Demand Income Elasticity of Demand and How the elasticity does estimates help in managerial decision making? b) A city government is considering renting space in an all‑day parking garage for its 100 employees. The government estimates these employees' demand function for parking spaces is 150 ‑ 50P (P ≥ $1), where P is the per-day price of parking, and the city will pass on the cost. If the city needs not charge each of its employees the same price for a parking space, what is the maximum amount the city could pay for the 100 spaces, and what would be the average cost per space? Assume the employees’ union…
18- Important medicines whose demand slightly changes only even if there is a change in price have ________ demand. a. Perfectly elastic b. Perfectly inelastic c. Inelastic d. Unitary elastic
Exercise : Following an increase in it's price, from 10$ to 12$, the demand for a good falls from 10500 to8100 units.What elasticity of demand would you estimate from these data? Calculate its value, first by using the general formula (for discrete changes), then by assuming a constantconstant elasticity of demand (log formula).Calculate the demand for p=9 (note q9 the quantity for p=9), using the general formula then in log of the elasticity calculated in Now, Knowing the value of the direct price elasticity of demand calculated previously, assuming constant costs andcosts and rivals not responding to your price cut, would you have recommended the price cut from 10 to 9?price cut from 10 to 9 ?
Consider public policy aimed at smoking.a. Studies indicate that the price elasticity of demandfor cigarettes is about 0.4. If a pack of cigarettescurrently costs $5 and the government wantsto reduce smoking by 20 percent, by how muchshould it increase the price?b. If the government permanently increases theprice of cigarettes, will the policy have a largereffect on smoking one year from now or five yearsfrom now?c. Studies also find that teenagers have a higherprice elasticity of demand than adults. Why mightthis be true?
a)Use the following demand and supply functions to calculate the elasticity of demand at market equilibrium QD=-53P+355 Qs=32P+65 Round your answer to the nearest hundredthb)Jack is looking to determine the difference in the cost of capital of debt between two debt issuers: Issuer One is selling the bond at par, with a face value of $1000, and semi-annual coupon payments of $60 Issuer Two is selling his bond at par, with a face value of $1100 and coupon payments of $50 every six months. However, Issuer Two must pay issuing expenses of $40 per bond, and a discount of $20. Both bonds term to maturities are expected to be 10 years. Help Jack to determine the difference in the cost of capital between these two bonds? Assume a tax rate of 40% A 2.34% B 0.02% C 6.34% D 7.37% E 1.31%