A. The price of gasoline increases from 16 per barrel to 30 per barrel and as a result, the demand per month for new cars changes from 550 to 300. Part 1: The elasticity is. Part 2: These goods are (inferior, normal, complements or substitutes)

A. The price of gasoline increases from 16 per barrel to 30 per barrel and as a result, the demand per month for new cars changes from 550 to 300. Part 1: The elasticity is. Part 2: These goods are (inferior, normal, complements or substitutes)

Name: Calculate the elasticity for the following questions (USING THE MIDPOI
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Description: Calculate the elasticity for the following questions (USING THE MIDPOINT (AVERAGE) FORMULA) and indicate if the goods are: (Please Include The Negative signs in your answers where appropriate and calculate to 2 decimals) please answer all parts to2

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter5: Elasticity

Section: Chapter Questions

Problem 31CTQ: Economists define normal goods as having a positive income elasticity. We can divide normal goods...

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Show youir solution (Do not drop the sign of the Elasticity) 1.Assume that the Price Elasticity of Demand for a product is -.32. Currently, at the price of P 230.00, the demand is 2300 units. The seller is intending to increase the price by 4.5%, what will be the new demand for the product? Will the seller increase his price or not? 2.If the price of the product is reduced by 6.25% from P 39.50, what will be the new quantity demand if the original demand is 8000 units and the computed Price elasticity of Demand is -1.38? Should the price be reduced or not?