Purchase Solution

# Elasticities and Price of Demand and Supply

Not what you're looking for?

1. If a 1% fall in the price of a product cause the quantity demanded of the product to increase by 2%, demand is
(a) inelastic
(b)elastic
(C) unit elastic
(D) perfectly elastic

2.The minimum acceptable price for a product that Juan is willing to receive is \$20. It is \$15 for Carlos. The actual price they receive is \$25. What is the amount of the producer surplus for Juan Carlos combined?
10, 15, 20 or 25 dollars.

3. Compared to the lower-right portion, the upper-left portion of most demand curves tends to be
(a) more inelastic
(b) more elastic
(c)unit elastic
(d) perfectly inelastic

4. Katie is willing to pay \$50 for a product and Tom is willing to pay \$40. The actual price that they have to pay is \$30. What is the amount the consumer surplus for Katie and Tom combined. \$30, \$40, \$50 or \$60

5. If when the price of a product rises for m\$1.50 to \$2, the quantity demanded of the product decreases from 1000 to 900, the price elasticity of demand coefficient, using the midpoint formula is
(a)3
(b)2.71
(c)0.37
(D)0.33

##### Solution Summary

There are 5 short answer type problems. Solution to each problem depicts the step by step methodology to reach the final answer.

##### Solution Preview

Please refer attached file for complete solution. Expressions typed with the help of equation writer are missing here.

Solutions:

1.
Change in quantity demanded=2%
Price elasticity of demand=Change in quantity demanded/change in prices=2%/(-1%)=-2
Absolute value of price ...

Solution provided by:
###### Education
• BEng (Hons) , Birla Institute of Technology and Science, India
• MSc (Hons) , Birla Institute of Technology and Science, India
###### Recent Feedback
• "Thank you"
• "Really great step by step solution"
• "I had tried another service before Brain Mass and they pale in comparison. This was perfect."
• "Thanks Again! This is totally a great service!"
• "Thank you so much for your help!"

##### Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

##### Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

##### Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

##### Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

##### Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.