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    Mitchell's equilibrium consumption and own-price elasticity

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    If a price increase from $5 to $7 causes quantity demanded to fall from 250 to 100, what is the
    absolute value of the own-price elasticity at a price of $7?
    A)1.75.
    B) 5.25.
    C) 0.19.
    D) 2.15.

    Mitchell's money income is $150, the price of X is $2, and the price of Y is $2. Given these prices and
    income, Mitchell buys 50 units of X and 25 units of Y. Call this combination of X and Y bundle J. At
    bundle J Mitchell's MRS is 2. Given these prices and income, what is Mitchell's equilibrium
    consumption of X?
    A) X < 50.
    B) X = 50.
    C) X > 50.
    D) X = Y.

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    https://brainmass.com/economics/demand-supply/mitchell-equilibrium-consumption-own-price-elasticity-372605

    Solution Preview

    If a price increase from $5 to $7 causes quantity demanded to fall from 250 to 100, what is the
    absolute value of the own-price elasticity at a price of $7?
    A)1.75.
    B) 5.25.
    C) 0.19.
    D) 2.15.
    Percentage change in price = (5-7)/7=-.286 or -28.6%
    Percentage change in quantity demanded = (250-100)/100=1.5 or 150%
    Own price ...

    Solution Summary

    Answers two multiple choice economics problems on price elasticity of demand and equilibrium consumption.

    $2.19