for good X is given by: X(p, Pv. 1) = 160 - 3 px-4 py +0.2 p.Dv -051-0002F and assume that the prices and income are given by p, = 10, p= 5 and i= 100. a) Compute the own-price demand curve, cross-price demand curve, and Engel curve. b) Determine whether good X is a normal good or an inferior good. c) Determine whether goods X and Y are gross substitutes, gross complements, or nether.

for good X is given by: X(p, Pv. 1) = 160 - 3 px-4 py +0.2 p.Dv -051-0002F and assume that the prices and income are given by p, = 10, p= 5 and i= 100. a) Compute the own-price demand curve, cross-price demand curve, and Engel curve. b) Determine whether good X is a normal good or an inferior good. c) Determine whether goods X and Y are gross substitutes, gross complements, or nether.

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

Chapter4: Estimating Demand

Section: Chapter Questions

Problem 6E

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Consider the demand function for good1, Q1 = 2037 - 9P1 + 0.6000000000000001P2 - 0.75P3 + 0.07Y Where, price of good1 (P1) is 59, price of good2 (P2) is 255, price of good3 (P3) is 195, and income (Y) is 24425; (a) Find the price elasticity of demand (PED). (Give your answer to two decimal places) (b) Find the income elasticity of demand (YED). (Give your answer to two decimal places) c) Find the cross price elasticity of demand (XED) between good1 and good3. (Give your answer to east two decimal places) d) Estimate the percentage change in the demand for good1 resulting from a 4% decrease in the price of good2. (Give your answer to two decimal places, if required)
Suppose the generalized demand function for good X is Qd=60-2Px+0.01M+7Pr a.Suppose M=40,000 and Pr=20 what is the direct demand function b.Suppose the supply function is Qs=-600+10Px, what are the equilibrium price and quantity? c.What happens to equilibrium price and quantity if other things remain the same as in part (b) but income increases to 52,000? d.What happens to equilibrium price and quantity if other things remain the same as in part (b) but the price of the related good decrease to 14? e.What happens to equilibrium price and quantity if other thing remain the same, income and price of related goods are at their original levels and supply shifts to Qs=-360+10Px?
The following estimates have been obtained for the market demand for cereal In Q= 9.01- 0.68 In P+0.75In A-1.3M, where Q is the quantity of cereal,P is the price of cereal,A is the level of adverstising, and M is income. Based on this information,determine the effect on the consumption of cereal of : a: A 5 percent reduction in the price of cereal. b: A 4 percent increase in income. c: A 20 percent reduction in cereal advertising.
consider the demand function for good1, Q1 = 2452 - 7P1 + 0.4P2 - 1.25P3 + 0.09Y Where, price of good1 (P1) is 29, price of good2 (P2) is 181, price of good3 (P3) is 199, and income (Y) is 30466; (a) Find the price elasticity of demand (PED). (Give your answer to two decimal places) (b) Find the income elasticity of demand (YED). (Give your answer to two decimal places) (c) Find the cross-price elasticity of demand (XED) between good1 and good3. (Give your answer to east two decimal places) (d) Estimate the percentage change in the demand for good1 resulting from an 8% decrease in the price of good2. (Give your answer to two decimal places, if required) (e) Based on the value of YED, comment on the nature/type of the goods Answer in one word. (f) Based on the value of the XED between good 1 and good3, comment on the relationship between these two goods Answer in one word.
In a particular market, demand and supply curves are defined by the following equations: P=50 – 0.5QD QS= -20 + 2P where, P is the price in pounds, QS is the quantity supplied and QD is the quantity demanded. (a) What is the equilibrium price and quantity? (b) What is the price elasticity at a price of £35? (c) What do you expect will happen to total expenditure on this good if the price increases from £35 to £40? Is this expectation confirmed if you calculate the total revenue for each price?
In a particular market, demand and supply curves are defined by the following equations: P=50 – 0.5QD QS= -20 + 2P where, P is the price in pounds, QS is the quantity supplied and QD is the quantity demanded. 1. What is the equilibrium price and quantity? 2. What is the price elasticity at a price of £35? 3. What do you expect will happen to total expenditure on this good if the price increases from £35 to £40? Is this expectation confirmed if you calculate the total revenue for each price?
Consider the demand function for good1, Q1 = 2795 - 4P1 + 0.5P2 - 0.25P3 + 0.08Y Where, price of good1 (P1) is 52, price of good2 (P2) is 186, price of good3 (P3) is 176, and income ( Y ) is 22368; (a) Find the price elasticity of demand (PED). (b) Find the income elasticity of demand (YED). (c) Find the cross price elasticity of demand (XED) between good1 and good3. (d) estimate the percentage change in the demand for good1 resulting from a 12% decrease in the price of good2
No written by hand solution Suppose that the market for video games is competitive with demand function Qd = 170 – 4p + 2Y + 3pm – 2pc, where Qd is the quantity demanded, p is the market price, Y is the monthly budget that an average consumer has available for entertainment, pm is the average price of a movie, and pc is the price of a controller that is required to play these games. Given that Y = $100, pm = $30 and pc = $30, use Excel to calculate quantity demanded for p = $10 to p = $80 in $5 increments. Using Excel’s spreadsheet Find Qd = ________ when P=$30. Find Qd = ________ when P=$45. Now, Y increases to $120. Re-calculate the demand schedule and find Qd = ________ when P=$20. Let Y = $100 again, but pm increases to $40. Re-calculate the demand schedule and find Qd = ________ when P=$25. Let Y = $100, pm = $30, and pc increases to $40. Re-calculate the demand schedule and find Qd = ________ when P=$50.
The demand for hamburgers is given by Qd=10-p and the supply is Qs=4p-10, where pd and ps are, respectively the price paid by demanders and the price received by suppliers. A: Draw the demand and supply functions. What is the price-elasticity of demand? What is the price-elasticity of supply? B: Find the equilibrium quantity and price, and show them on the graph. C: Suppose due to the rising health awareness the demand decreases to Q d=5-p. Find the new equilibrium prices and quantity, and show them on the graph. D: Suppose that the demand and supply are as before, i.e. Qd=10-p and Qs=4p-10, but now the government imposes a quantity tax on the suppler at the rate of 1 per unit of the quantity. What quantity will be sold and what price? E: In part d), what is the total amount of tax collected by the government? How this tax amount is divided between the demanders and supplier? Who pays more and why? Explain
Consider the demand function for good1, Q1 = 2536 - 8P1 + 0.6000000000000001P2 - 1.75P3 + 0.05Y Where, price of good1 (P1) is 42, price of good2 (P2) is 197, price of good3 (P3) is 155, and income (Y) is 47792; (a) Find the price elasticity of demand (PED). (b) Find the income elasticity of demand (YED). (c) Find the cross-price elasticity of demand (XED) between good1 and good3. (d) Estimate the percentage change in the demand for good1 resulting from a 6% decrease in the price of good2. (e) Based on the value of YED, comment on the nature/type of the goods. (f) Based on the value of the XED between good 1 and good3, comment on the relationship between these two goods.Iknow its more than three questions but whoever solve 1,2,3 will able to solve rest. please solve all.
Assuming a company produces two products - X and Y. The demand for company X's product is given by Qx = 24 – 6Px + 8Py. Suppose product X sells for $6.00 per unit and good Y sells for $3.00 per unit. Calculate the cross-price elasticity of demand between goods X and Y at the given prices. Are goods X and Y substitutes or complements? What is the own price elasticity of demand at these prices? How would your answers to parts (a) and (b) change if the price of X dropped to $5.00 per unit?
Please no written by hand solution Instead of assuming a linear demand curve, suppose we assume that demand is char- acterized by the following demand function qD = 13.572P −1.5 (a) Suppose the current price is $5. What is the price elasticity of demand at this price? (b) Over what range of prices is demand elastic? Inelastic? Unit elastic?