If there are 10 bakeries in a small city, why might the elasticity of demand for the products any one of them supplies be high? Why might this small city not be a good location for you to open a new bakery?

If there are 10 bakeries in a small city, why might the elasticity of demand for the products any one of them supplies be high? Why might this small city not be a good location for you to open a new bakery?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter5: Elasticity

Section: Chapter Questions

Problem 19RQ: Would you usually expect elasticity of demand or supply to be higher in the short run or in the long...

See similar textbooks

Related questions

Q: What is the formula for measuring the price elasticity of supply? Suppose the price of apples goes…

Q: Suppose a gelato shop increases its prices by 5 percent and sees a resulting 10 percent decrease in…

A: price elasticity can be defined as change in demand due to the change in price here we calculate the…

Q: Calculate the price elasticity of demand? What will happen to the total revenue if the seller…

A: There exists a relationship between the average revenue(AR), which is basically the price(P), the…

Q: Suppose that a company sells comic books for $3 and sells 30 million copies. If they were to raise…

A: Price elasticity of demand measures the responsiveness of change in quantity demand to change in…

Q: How can we increase the Total Revenue of products using elasticity? Explain by giving examples. Give…

A: The way to maximize the revenue is to identify the elasticity of demand. TR is the product of Prices…

Q: Until recently, Cynthia's Cycles rented bicycles for $8 and they rented 320 bicycles per month. They…

A: Elasticity of demand is used to measure the responsiveness of change in the quantity demanded of a…

Q: The manager of the Sell-Rite drug store accidentally mismarked a shipment of 20- pound bags of…

A: Price elasticity of demand measures the responsiveness of quantity demanded to a change in price.…

Q: The weekly sales of Honolulu red oranges is given by q=960-10p. (a)Calculate the price elasticity of…

A: The price elasticity is the responsiveness of change in the quantity demanded because of the change…

Q: What would the gasoline price elasticity of supply mean to UPS or FedEx?

A: The supply elasticity of a commodity provides a quantifiable relationship between its supply and its…

Q: month, he used to spend 1,000 dirham a months in supermarket A. Now that he earns AED 28,000 per…

A: Given information, Initial income: AED 17,000 Initial spending: 1,000 dirham Final income: AED…

Q: Bob of Bob's Burgers used to charge $2.20 for a certain hamburger and sold 4000 units. When he…

A: The demand curve shows the inverse relationship between price and quantity demanded. The price is…

Q: Honest Abe's Used Cars estimates the price elasticity of demand for their cars to be −5.1. Last…

A: Given information, Price elasticity of demand: -5.1 Percentage change in quantity demanded (sold…

Q: Salina advertises her production of home workout supplies. Initially an exercise floor pad is sold…

A: Note: There are multiple sub parts in the question. Hence, we shall answer the first three sub parts…

Q: A town of 2000 households constitutes a market for eggs. Current sales are 2400 dozen eggs per week…

A: Elasticity of demand is given by the rate of percentage change in quantity demanded to price.

Q: Suppose that a new restaurant entry increased consumer elasticity of demand for the sushi appetizer…

A: * SOLUTION :-

Q: You sell two different goods: printers and toner cartridges. The price elasticity of demand for the…

A: First, we compute the change in revenue from the printer. Pre-increase revenue (Rp0) = P0 x Q0 = Rm…

Q: ou should adjust your price to ________ due to the new entry and decreased demand elasticity.

Q: 2. An exclusive Yoghurt manufacturer sells 4,000 gallons per month at a price of GHS 40 each. When…

A: A) Calculate the price elasticity of demand as follows: Thus, the price elasticity of demand is…

Q: 2. At the price of $15, Zeke were able to sell 7,000 ball pens. When he increased the price by $1O,…

A: The elasticity of demand measures the responsiveness of percentage change in quantity demanded due…

Q: Draw three graphs to summarize a perfectly elastic, a unitary (unit elasticity) and a perfectly…

A: The elasticity of demand refers to the responsiveness of quantity demand to change in the prices of…

Q: How can we increase the Total Revenue of products by using elasticity ? Explain shortly.

A: Total Revenue is the total amount income generated by sale of good or service. Total Revenue = Price…

Q: . A hot dog vendor faces a daily demand curve of Q=1800-15P, where P is the price of a hot dog in…

A: Demand function of the hot dog vendor and quantity sold are given. Q= 1800-15p Quantity sold= 300…

Q: How can we increase the Total Revenue of products by using elasticity? Explain them by giving…

A: Total revenue is the price times quantity

Q: What if a new restaurant entry increased consumer elasticity of demand for the sushi appetizer from…

A: Profit is the excess amount of total revenue over the total cost.

Q: a. Calculate the price elasticity of demand for the Yoghurts over this price range. b. Is demand…

A: Revenue is the total income earned by selling the products and services in the market.

Q: elasticity of demand

A: The ‘ep’ captures the % of quantity change to % of price change. It can be measured through…

Q: What is the formula for measuring the price elasticity of supply? Suppose the price of apples goes…

A: Formula for measuring price elasticity of supply : Price elasticity of supply = Percentage change in…

Q: Patty's Putts increased the price of a round of miniature golf by 66.0%. Patty has calculated her…

A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…

Q: George has been selling 5,500 T-shirts per month for $9.50. When he increased the price to $10.50,…

A: Price elasticity of demand:-The price elasticity of demand is a measure of how a product's…

Q: Two drivers—Kenji and Lucia—each drive up to a gas station. Before looking at the price, each places…

A: Perfectly elastic demand means when the percentage of change in quantity demanded is infinite even…

Q: A farmer produced 8400 tons of grapes and each ton sales for $200. Grapes are found to be a perfect…

A: Price elasticity supply refers to how market respond (change of supply of a product) to change in…

Q: John owns the Latin Chocolate store. He charges $5 per pound for her hand made chocolate. You, the…

A: John is now the owner of Latin Chocolate store and charging $5/hand made chocolate. Having price…

Q: Did Starbucks start a pumpkin boom? Ever since Starbucks introduced its famed pumpkin spice latte…

A: Supply(ss) price(p) elasticity(e) measures the percentage(%) change in quantity supplied(QS) due to…

Q: How is it possible for the elasticity of demand to change over time (in the long run)? Explain.

A: Price elasticity is the percentage change in the quantity demanded due to one percent change in…

Q: Ali's Gyros operates near a college campus. Ali has been selling 120 gyros a day at $4.50 each and…

A: a. The price elasticity of demand using the midpoint formula (Arc Ed) Arc Ed = [(Qd2 – Qd1) /…

Q: Your younger brother needs $600 to buy a new computer. He has opened a sandwich stand to make the…

A: The elasticity of demand is the reaction of demand due to change in price of goods and services,…

Q: How can we increase the Total Revenue of products by using elasticity?

A: Elasticity measures the responsiveness of the quantity demanded of good to the change in price.

Q: How Does Elasticity Increase the Revenue in Small Businesses? Explain in detail .

A: The quantity demanded of a good is defined as the amount of the good the consumers of the good are…

Q: What is the relationship between price elasticity, revenue and marginal revenue?

A: Answer: Introduction: Price elasticity of demand: price elasticity of demand measures the percentage…

Q: You run a hotel and you have determined that if you lower the price of your rooms 15% you will be…

A: Price Elasticity of demand: Price elasticity of demand is the measurement of the percentage change…

Q: The current price of Gucci bags is $39 each and sales of the bags equal 400 per week. If the price…

A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…

Q: what is the concept of elasticity and also explain how elasticity affects the revenue earned by a…

A: In economics, the law of demand is an important concept that establishes the functional relation…

Q: Could someone explain the elasticity of demand and supply for Luxottica's product/industry?

A: Price elasticity of demand for a good refers to the responsiveness of the buyers indicated by…

Q: If the price of Zumba class increases by 20%, while the quantity demanded for Zumba decreased by…

A: The elasticity of (Ed) demand measures the extent of responsiveness of quantity (Qd) demanded due to…

Q: Diamond Sisters (a monopolist in the sale of diamonds) has decided to increase the price of their…

A: Answer: Given, Increase in the price of industrial-grade diamonds = 10% The elasticity of demand for…

Q: a) What can be said about the price elasticity of demand in each of the following statements? i.…

A: (i) “The Tikka delivery business in this town is very competitive. I’d lose half my customers if I…

Question

If there are 10 bakeries in a small city, why might the elasticity of demand for the products any one of them supplies be high? Why might this small city not be a good location for you to open a new bakery?

Video Video

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Would you usually expect elasticity of demand or supply to be higher in the short run or in the long run? Why?
Suppose Erin, the owner-manager of a local hotel projects the following demand for her rooms: a. Calculate the price elasticity of demand between 90 and 110. b. Is the price elasticity of demand between 90 and 110 elastic, unit elastic, or inelastic? c. Will Erins total revenue rise if she increases the price from 90 to 110? d. Calculate the price elasticity of demand between 110 and 130. e. Is the price elasticity of demand between 110 and 130 elastic, unit elastic, or inelastic? f. Will Erins total revenue rise if she increases the price from 110 to 130?
If the midpoint on a straight-line demand curve is at a price of $7, what can we say about the elasticity of demand for a price change from $12 to $10? What about from $6 to $4?
The price elasticity of the demand for gasoline is -0.02. The price elasticity of demand for gasoline at Joe’s 66 station is -1.2. Explain what might account for the different elasticities.
Define the price elasticity of supply. Explain why the price elasticity of supply might be different in the long run than in the short run.
The Stopdecay Company sells an electric toothbrush for $25. Its sales have averaged 8,000 units per month over the past year. Recently, its closest competitor, Decayfigh ter, reduced the price of its electric toothbrush from $35 to $30. As a result, Stopde cays sales declined by 1,500 units per month. What is the arc cross elasticity of demand between Stopdecays toothbrush and Decayfighters toothbrush? What does this indicate about the relationship between the two products? If Stopdecay knows that the arc price elasticity of demand for its toothbrush is 1.5, what price would Stopdecay have to charge to sell the same number of units as it did before the Decayfighter price cut? Assume that Decayfighter holds the price of its toothbrush constant at $30. What is Stopdecays average monthly total revenue from the sale of electric toothbrushes before and after the price change determined in part (b)? Is the result in part (c) necessarily desirable? What other factors would have to be taken into consideration?
Can you think of an industry (or product) with near infinite elasticity of supply in the short term? That is, what is an industry that could increase Qs almost without limit in response to an increase in the price?
What is the price elasticity of demand for a vertical demand curve? a. Perfectly inelastic b. Inelastic but not perfectly inelastic c. Unitary elastic d. Elastic but not perfectly elastic e. Perfectly elastic
Suppose you learned that the price elasticity of demand for wheat is 0.7 between the current price for wheat and a price 2 higher per bushel. Do you think that farmers collectively would try to reduce the supply of wheat and drive the price up 2 higher per bushel? Explain your answer. Assuming that they would try to reduce supply, what problems might they have in actually doing so?