For the demand function x=D(p)=50-4p : (a) The elasticity is E(p)= (b) When p=5 , the elasticity E(5)= the demand is ---Select--- v (c) The price at which the total revenue is at a maximum is p=
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- (Calculating Price Elasticity of Demand) Suppose that 50 units of a good are demanded at a price of Si per unit. A reduction in price to $0.20 results in an increase in quantity demanded to 70 units. Using the midpoint formula, show that these data yield a price elasticity of 0.25. By what percentage would a 10 percent rise in the price reduce the quantity demanded, assuming price elasticity remains constant along the demand curve?If bus travel is an inferior good, its income elasticity of demand is a. strictly greater than 1. b. positive. c. equal to zero. d. negative.The price elasticity of demand for air travel differs radically from first-class (1.3) to unrestricted coach (1.4) to restricted discount coach (1.9). What do these elasticities mean for optimal prices (fares) on a cross-country trip with incremental variable costs (marginal costs) equal to $120?
- In an attempt to increase revenues and profits, a firm is considering a 4 percent increase in price and an 11 percent increase in advertising. If the price elasticity of demand is 1.5 and the advertising elasticity of demand is +0.6, would you expect an increase or decrease in total revenues?The consumer demand for a given product (where x represents number of units and p represents price is $) is given by the function x= (45-3p)2 Using the concept of Elasticity of Demand, determine the price that the product should be sold at to maximize revenue. Round to the nearest tenth.Mr. Haris has the following demand equation for a certain product: Q = 30 - 2P. At a price of $7, what is the point elasticity? Between prices of $5 and $6, what is the arc elasticity? If the market is made up of 100 individuals with demand curves identical to Mr. Smith’s, what will be the point and arc elasticity for the conditions specified in parts a and b?
- The demand function intercept Q1=50-p intercept another linear demand function Q2 at p=10. The elasticity of demand for Q2 is four times larger than that of Q1 at that point. Find the demand function for Q2Given the function below, complete parts (a) through (c). q=D(x)=kxn, where k is a positive constant and n is an integer greater than 0. (a) Find the elasticity of the demand function. (b) Is the value of the elasticity dependent on the price per unit? (c) Does the total revenue have a maximum? When?Mr. Haris has the following demand equation for a certain product: Q = 30 - 2P. a. At a price of $7, what is the point elasticity? b. Between prices of $5 and $6, what is the arc elasticity? c. If the market is made up of 100 individuals with demand curves identical to Mr. Smith’s, what will be the point and arc elasticity for the conditions specified in parts a and b?
- What would the elasticity be if the demand function were Q = 150 -2P (USE P = 100)?In this problem, p is in dollars and q is the number of units. (a) Find the elasticity of the demand function 2p + 3q = 270 at the price p = 15. (b) How will a price increase affect total revenue? Since the demand is elastic, an increase in price will increase the total revenue.Since the demand is unitary, there will be no change in the revenue with a price increase. Since the demand is inelastic, an increase in price will increase the total revenue.Since the demand is elastic, an increase in price will decrease the total revenue.Since the demand is inelastic, an increase in price will decrease the total revenue.If average household income increases by 10%, from $50,000 to $55,000 per year, the quantity of rooms demanded at the Peacock (falls, rises) from rooms _____ per night to _____rooms per night. Therefore, the income elasticity of demand is (negative, positive) , meaning that hotel rooms at the Peacock are (a normal good, an inferior good) . If the price of a room at the Grandiose were to decrease by 10%, from $250 to $225, while all other demand factors remain at their initial values, the quantity of rooms demanded at the Peacock (falls, rises) from______rooms per night to_______rooms per night. Because the cross-price elasticity of demand is (negative, positive), hotel rooms at the Peacock and hotel rooms at the Grandiose are (complements, substitutes) . Peacock is debating decreasing the price of its rooms to $175 per night. Under the initial demand conditions, you can see that this would cause its total revenue to (decrease, increase) . Decreasing the price will always have this…