Suppose that demand curve for apple in Brooklyn is as the followings: Qu = 72 – 12P where Qu is for the quantities demanded in tons, and P is the price of apple in dollars per kg? 1) If price elasticity of demand for apple at price P* is equal to -6/9, how much is P*? 2) What is quantity demanded at price P* at which price elasticity of demand for apple equals to -6/9?

Suppose that demand curve for apple in Brooklyn is as the followings: Qu = 72 – 12P where Qu is for the quantities demanded in tons, and P is the price of apple in dollars per kg? 1) If price elasticity of demand for apple at price P* is equal to -6/9, how much is P? 2) What is quantity demanded at price P at which price elasticity of demand for apple equals to -6/9?

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter5: Elasticity Of Demand And Supply

Section: Chapter Questions

Problem 1.1P: (Calculating Price Elasticity of Demand) Suppose that 50 units of a good are demanded at a price of...

See similar textbooks

Similar questions

Using the midpoint formula for calculating the elasticity of supply, if the price of a good rose from $95 to $105, what would be the elasticity of supply if the quantity supplied changed from a. 38 to 42? b. 78 to 82? c. 54 to 66?
(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?
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?
Explain why using the midpoint formula for calculating the elasticity of demand gives the same result whether price increases or decreases, but using the initial price and quantity instead of the average does not.
A life-saving medicine without any close substitutes will tend to have a. a small elasticity of demand. b. a large elasticity of demand. c. a small elasticity of supply. d. a large elasticity of supply.
The price elasticity of demand for personal computers is estimated to be 2.2. If the price of personal computers declines by 20 percent, what will be the expected percentage increase in the quantity of computers sold?
If supply is elastic, will shifts in demand have a larger effect on equilibrium quantity or on price?
Suppose the cross-price elasticity of apples with respect to the price of oranges is 0.4, and the price of oranges falls by 3. What will happen to the demand for apples?