Pearson eText Economics -- Instant Access (Pearson+)
13th Edition
ISBN: 9780136879459
Author: Michael Parkin
Publisher: PEARSON+
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Question
Chapter 4, Problem 18APA
To determine
Types of price elasticity.
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Students have asked these similar questions
The accompanying table shows the price and monthly demand for barrels of gosum berries in Gondwanaland.
Price of gosum berries per barrel
Native demand for gosum berries per month
$100
0
$90
100
$80
200
$70
300
$60
400
$50
500
$40
600
$30
700
$20
800
$10
900
$0
1,000
A) Using the midpoint method (show your work), calculate the price elasticity of demand when the price of a barrel of gosum berries rises from $10 to $20. What kind of elasticity is this value that you computed for the price elasticity of demand, and what does it mean for how demand will change based on a change in price within this price range?
(Enter your response here.)
B) Using the midpoint method (show your work), calculate the price elasticity of demand when the price of a barrel of gosum berries rises from $70 to $80. What kind of elasticity is this value that you computed for the price elasticity of demand, and what does it…
Step 1
Analyze gasoline price hike statistics in the following scenario.
In June 2008, the U.S. retail gas price jumped from $3 to $4 a gallon.
This is a 33% increase in price from January 2008.
During that time, the total quantity of gasoline purchased fell by 3%.
Supplies of gasoline produced also decreased from 1 million barrels to 800,000 barrels.
No viable substitute has been created to replace gasoline.
Step 2
Calculate the price elasticity of gasoline Be sure to show all work.
Calculate the price elasticity of demand for gasoline.
Calculate the elasticity of supply using the information provided.
Calculate the changes in consumer and producer surplus.
Because there is no viable substitute for gasoline at this time, what can you say about the cross-elasticity and income elasticity of supply and demand for gasoline?
Is the demand for gasoline elastic, inelastic, perfectly elastic or inelastic, or unit elastic?
Use the following as a guide for your calculation
To show…
The graph shows the demand curve for streaming subscriptions. The price of a
subscription is $15 a month.
Price (dollars per month)
30-
25-
20-
15-
10-
5-
5
10 15 20 25 30 35 40
Quantity (millions of streaming subscriptions)
What is the value of the 10 millionth subscription? What is the maximum
amount someone is willing to pay for the 30 millionth subscription?
The value of the 10 millionth subscription is
a month, and the
maximum amount someone is willing to pay for the 30 millionth subscription is
a month.
Chapter 4 Solutions
Pearson eText Economics -- Instant Access (Pearson+)
Ch. 4.1 - Prob. 1RQCh. 4.1 - Prob. 2RQCh. 4.1 - What makes the demand for some goods elastic and...Ch. 4.1 - Prob. 4RQCh. 4.1 - Prob. 5RQCh. 4.2 - Prob. 1RQCh. 4.2 - Prob. 2RQCh. 4.2 - What does the cross elasticity of demand measure?Ch. 4.2 - Prob. 4RQCh. 4.3 - Prob. 1RQ
Ch. 4.3 - Prob. 2RQCh. 4.3 - Prob. 3RQCh. 4.3 - Provide examples of goods or services whose...Ch. 4.3 - Prob. 5RQCh. 4 - Rain spoils the strawberry crop, the price rises...Ch. 4 - Prob. 2SPACh. 4 - Prob. 3SPACh. 4 - Prob. 4SPACh. 4 - Prob. 5SPACh. 4 - Prob. 6SPACh. 4 - Prob. 7SPACh. 4 - Prob. 8SPACh. 4 - The table sets out the supply schedule of jeans....Ch. 4 - Prob. 10APACh. 4 - The figure shows the demand for DVD rentals. a....Ch. 4 - Prob. 12APACh. 4 - Prob. 13APACh. 4 - Prob. 14APACh. 4 - Prob. 15APACh. 4 - Prob. 16APACh. 4 - Prob. 17APACh. 4 - Prob. 18APACh. 4 - When Alexs income was 3,000, he bought 4 bagels...Ch. 4 - Prob. 20APACh. 4 - Prob. 21APACh. 4 - Prob. 22APACh. 4 - The table sets out the supply schedule of...Ch. 4 - Prob. 24APACh. 4 - Prob. 25APACh. 4 - Prob. 26APACh. 4 - Prob. 27APA
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