The elasticity of demand for energy- ‘Electricity, and Gas’- is relatively price inelastic in the UK and other European countries. Will a change in supply have a large or a small impact on the equilibrium price, quantity, and total revenue of the firm? I need help answering this question and i need to include a diagram to support my answer

The elasticity of demand for energy- ‘Electricity, and Gas’- is relatively price inelastic in the UK and other European countries. Will a change in supply have a large or a small impact on the equilibrium price, quantity, and total revenue of the firm? I need help answering this question and i need to include a diagram to support my answer

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter5: Elasticity Of Demand And Supply

Section: Chapter Questions

Problem 13PAE

See similar textbooks

Similar questions

Suppose you learned that the price elasticity of demand for wheat is 0.7 between the current price for wheat and a price 2 higher per bushel. Do you think that farmers collectively would try to reduce the supply of wheat and drive the price up 2 higher per bushel? Explain your answer. Assuming that they would try to reduce supply, what problems might they have in actually doing so?
If the midpoint on a straight-line demand curve is at a price of $7, what can we say about the elasticity of demand for a price change from $12 to $10? What about from $6 to $4?
What is the price elasticity of demand for a vertical demand curve? a. Perfectly inelastic b. Inelastic but not perfectly inelastic c. Unitary elastic d. Elastic but not perfectly elastic e. Perfectly elastic
The Stopdecay Company sells an electric toothbrush for $25. Its sales have averaged 8,000 units per month over the past year. Recently, its closest competitor, Decayfigh ter, reduced the price of its electric toothbrush from $35 to $30. As a result, Stopde cays sales declined by 1,500 units per month. What is the arc cross elasticity of demand between Stopdecays toothbrush and Decayfighters toothbrush? What does this indicate about the relationship between the two products? If Stopdecay knows that the arc price elasticity of demand for its toothbrush is 1.5, what price would Stopdecay have to charge to sell the same number of units as it did before the Decayfighter price cut? Assume that Decayfighter holds the price of its toothbrush constant at $30. What is Stopdecays average monthly total revenue from the sale of electric toothbrushes before and after the price change determined in part (b)? Is the result in part (c) necessarily desirable? What other factors would have to be taken into consideration?
The elasticity of demand for energy- ‘Electricity, and Gas’- is relatively price inelastic in the UK and other European countries. Will a change in supply have a large or a small impact on the equilibrium price, quantity, and total revenue of the firm? This question needs to be at least 700 words.
Explain the term price elasticity of demand? How is it measured? What factors influence market demand for products? If the price elasticity is -3 and RM 100 is the marginal cost of product X, what should be the optimal sale price? (Hint: apply the mark-up rule) (600-700 words)
The elasticity of Supply is an important concept in Microeconomics as it relates to a business's ability to adjust its production and its production facility in response to market developments. Think of some examples of products and businesses that would have various degrees of Elasticity of Supply and share them here. For example, what would be the Elasticity of Supply for an original piece of art? What does this imply for the adjustment in this market to a change in Demand? How would you describe the Elasticity of Supply for a product such as peaches, plums, and other tree fruit? Consider first a brief period, such as weeks, and next a much longer period such as five years. How does the time horizon influence market adjustment when there is a change in Demand?
The elasticity of demand for energy- ‘Electricity, and Gas’- is relatively price inelastic in the UK and other European countries. Will a change in supply have a large or a small impact on the equilibrium price, quantity, and total revenue of the firm?
A firm manufactures high priced gold plated wrist watches. The firm is considering lowering the price of its watches from the current $1000 per unit to $700 per unit. The firm currently sells 6000 units per year. The firm's staff economist believes the price elasticity of demand to be -3 over this price range. If the firm lowers the price, will the total revenue increase, decrease or remain unchanged? Why? If it lowers the price, what will be the new level of quantity demanded? Of new total revenue? Would you suggest the firm to offer further price discount? Why? And Why not?
Explain the term price elasticity of demand? How is it measured? What factors influence market demand for products? If the price elasticity is -3 and RM 100 is the marginal cost of product X, what should be the optimal sale price? (Hint: apply the mark-up rule)
Explain how each of the factors would or would not affect the price elasticity of demand for a good or service that your company (or a company for which you have an interest) produces?
The manager of the Sell-Rite drug store accidentally mismarked a shipment of 20- pound bags of charcoal at $3.15 instead of the regular price of $4.25. In a week, a total of 180 bags of charcoal was sold. The store normally sells an average of 120 bags per week. What is the store’s arc elasticity of demand for charcoal? Also make an economic interpretation of the elasticity figure.