Suppose the price elasticity of demand for used cars is estimated to be 3. Demand for used cars __________ . If the price of used cars rises by 10%, the quantity demanded of used cars will go _____________ , and the total revenue will __________________
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A:
Q: Suppose the price elasticity of demand for used cars is estimated to be 3. What does this mean?
A: The elasticity of demand refers to the responsiveness of quantity demanded due to a change in price.…
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A: Hi. Since there are two questions, we will solve only the first one.
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Q: Suppose the price elasticity of demand for used cars is estimated to be 3. What does this mean? What…
A: Given the elasticity of demand = 3 Percentage fall in used cars = 10%
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A: (As per company policy we are only supposed to answer 1 question per session up to 3 sub parts sorry…
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A: Formula for cross price elasticity of demand: Ec = Percentage change in quantity demanded of good Y…
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A: Price elasticity of supply=percentage change in quantity supplied/percentage change in price.
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A: Introduction The elasticity of demand masures the percentage change in quantity demanded due to a…
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Q: Instructions Use this information to answer questions 17-30 17-30 30 The brice elasticity of the…
A: Price elasticity of demand = - Percentage change in quantity demanded / Percentage change in price
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A: Note:- Since we can only answer one question at a time, we'll answer the first one. Please repost…
Q: QUESTION TWO. Suppose the Daily Graphic Newspaper estimates that if it raises the price of its…
A: Answer: (d). Note: when the price of good changes then only the quantity demanded changes.…
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A: price elasticity of demand = %change in quantity demanded / %change in price
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Q: price elasticity of demand
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- Problem 1: American Company is interested in obtaining quick estimates of the supply and demand curves for coal. The firm's research department informs you that the elasticity of supply is approximatively 1.7, the elasticity of demand is approximatively -0.85, and the current price and quantity are $41 and 1,206 respectively. Price is measured in dollars per ton, quantity the number of tons per week. a. Find the supply and demand equations b. Calculate the new demand curve if the demand shifted by + 5%. c. If the government refused to let Americans raise the price when demand increased in (b) above, what shortage is created? d. Show the shortage in a graph. Label your graph.Discuss how may the concept of elasticities affect our country’s preference for commercial spaces and malls versus public parks and playgrounds. How does this choice impact the richness of our civic lives? Answer the question using 100-150 words only.Dashboard for Online Pricing Online the timing and tailoring of prices to specific models of products is the key to successful pricing in online markets. And “Thanks to the ready availability of data in online markets, a pricing manager can easily approximate the elasticity of demands for the different products it sells online.” Assuming a 10 percent decrease in price increases sales by 25 percent, calculate the price elasticity of demand? If the wholesale price of the online product is $50 and sells at a price comparison site that charges $.50 per click and boasts a conversion rate of 5 percent (an average of 20 clicks are needed to generate a sale). What price should you charge for the product? What is the optimal markup on cost? The authors assert that price sensitivity is affected by (1) product life cycles, and (2) numbers of competitors. In fact, “when the number of competing sellers doubles, a firm’s elasticity of demand is expected to double (and you should be able to…
- Suppose you are given a task for analysis the market elasticity for Sport Bike. You found that when the market price of bike is $250 the market demand is 800 bikes, whereas the market supply is 450 bikes. Yet, when the price rises to $280 the market demand is lower to 550 bikes but the market supply is up to 650 bikes. Your tasks are: a) What is price elasticity of the demand for Sport Bike? b) What is price elasticity of the supply for Sport Bike?The chart below shows how annual electricity for an average Ontario household would vary with the price paid for electricity. Calculate the arc elasticity of demand for electricity for this average houschold. Also, in the final column, calculate the total revenue from sales of clectricity to this household. Price Quantity Demanded Kwh/year Total Revenue $/kwh Elasticity of Demand $0.25 1200 -0.36 $0.20 1300 $0.15 1400 $0.10 1500 $0.05 1600 Hint: The own price elasticity of demand is the percentage change in the quantity demanded divided by the percentage change in the price. What factors do you think influence the elasticity of demand for this household?Creative Homework/Short Project Assume that you arean entrepreneur who runs a bakery that sells glutenfree breads and cakes. You believe that the currenteconomic conditions merit an increase in the price ofyour baked goods. You are concerned. however, thatincreasing the price might not be profitable becauseyou are unsure of the price elasticity of demand for yourproducts. Develop a plan for the measurement of priceelasticity of demand for your products. What findingswould lead you to increase the price? What findingswould cause you to rethink the decision to increaseprices? Develop a presentation for your class outlining(I) the concept of elasticity of demand, (2) why raisingprices without undetstanding the elasticity would bea bad move. (3) your recommendations for measurement. and (4) the potential impact on profits for elasticand inelastic demand
- True or False: Suppose you are advising the Dairy Farmers of Canada on changes in the milk market. Suppose the current price is $4.5 per gallon of milk and the quantity demanded is 2.5 million gallons of milk per day. Suppose price elasticity of demand is constant at 0.7. You are considering reducing the supply, so that the price rises to $5 per gallon. Total expenditure on milk by consumers will rise.Instructions Use this information to answer questions 17-30 17-30 30 The price elasticity of the gasoline demand is 0.35. The price elasticity of demand of rail transit during rush hour is 0.15 and during off peak hours is 1.2. The cross elasticity of demand of rail transit during rush hour with respect to the price of gasoline is 0.5 and the cross elasticity of demand of rail transit during off-peak hours with respect to the price of gasoline is 2. Moreover, the income elasticity of demand of rail transit during rush hour is 0.4 and the income elasticity of demand of rail transit during off peak hours is 0.7. Calculate the percent change in total revenue that would result from implementing the 10% fare raise during the gff-geak hours. Pay attention to the negative sign, it you enter your answer as a positive number, you are arguing that total revenue would increase otherwise, you are arguing that total revenue would decrease. NOTE: This is a numeric answer, no explanation is needed.…1. The American Mining Company is interested in obtaining quick estimates of the supply and demand curves for coal. The firm's research department informs you that the elasticity of supply is approxi- mately 1.7, the elasticity of demand is approximately -0.85, and the current price and quantity are $41 and $1,206, respectively. Price is measured in dollars per ton, quantity is captured as number of tons per week. (a) Is demand elastic, inelastic or unit elastic? Explain (b) Write down the linear supply and demand curves at the current price and quantity. (c) Using Excel, provide a graph of the demand and supply curves. Is the market in equilibrium? (d) Calculate the Total Revenue, Average Revenue, and Marginal Revenue of the American Mining Company at the equilibrium price and quantity.
- If the cross elasticity of demand is negative, then the two goods are substitutes. True/False When income increases from $80000 to $81000, the quantity demand of good A increases from 3000 to 3050. The income elasticity of demand for good A is _____________. If the price rises by 20% and quantity demanded falls by 40%, the coefficient of price elasticity of demand is ________. When demand is inelastic, then price and total revenue move in opposite directions. True/FalseWho does elasticity matter to the most? The government, the firm/business, or the individual/consumer.The figure shows the demand curve for a PlayStation game. The price elasticity of demand when the price increases from $30 to $50 is ________. 5/3 1.67 1 3/5
