Answered: Suppose that the quantity of root beer…

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter5: Elastic And Its Application

Section: Chapter Questions

Problem 6PA: Suppose that your demand schedule for DVDs is as follows: Price Quantity Demanded (income = 10,000)...

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Compute Price elasticity, Income and Cross Elasticity. ( Show complete solution)

1. Suppose that the quantity of root beer demanded declines from 103,000 gallons per week to 97,000 gallons per week as a consequence of a 12 percent increase in the price of root beer from $27. The price elasticity of demand is

2. When demand for a product goes from 100 to 200 and income goes up from $40,000 to $45,000 what is the income elasticity of demand?

3. The price of Good X increase from P100 to P150, the quantity demanded for Good Y decreased from 50 to 35.

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