Answered: The price elasticity of demand is…

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter5: Elasticity Of Demand And Supply

Section: Chapter Questions

Problem 4.9P: (Other Elasticity Measures) Complete each of the following sentences: a. The income elasticity of...

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The price elasticity of demand is inelastic for Mobile Phones and elastic for Play-stations. Suppose that technological advance doubles the supply of both products (that is, the quantity supplied at each price is twice what it was).

a. What happens to the equilibrium price and quantity in each market? Use a supply-and-demand graph for both Mobile Phones and Play-stations and analyze which product experiences a larger change in price
and which product experiences a larger change in quantity.

b. What happens to total revenue for each product? Briefly explain.

Don,t copy from any where. Answer step by step.Answer must be correct.

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