Answered: Prices are given according to the…

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter20: Elasticity: Demand And Supply

Section: Chapter Questions

Problem 13E: Using the following equation for the demand for a good or service, calculate the price elasticity of...

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Prices are given according to the supply and demand quantities of a good.

a) Graph the change in supply-demand quantities according to the price.
b) Find the equilibrium price and the equilibrium amount.
c) What is the demand price elasticity when the price increases from 6 TL to 8 TL? Evaluate the result.
d) What would the income price elasticity be if the consumer income increased from 2500 TL to 3000 TL for the same range? What kind of goods is this good?
e) What should the selling price be for the total revenue to be maximum? What will be the amount and maximum revenue at this selling price?

Cost (TL/adet)	Amount of demand (piece)	Amount of supply (piece)
2	125	30
4	115	38
6	105	46
8	95	54
10	85	62
12	75	70
14	65	78
16	55	86
18	45	94
20	35	102

Definition Video Definition Point where the demand and supply curves intersect. At the equilibrium price the quantity supplied of a good is equal to the quantity demanded. When the market is not in equilibrium, market surplus or market shortage occurs. The region that is above the price equilibrium indicates market surplus and the region below the price equilibrium indicates market shortage. Video

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