A What is the definition of price elasticity of demand? b. Explain the relationship between price elasticity and total revenue? How does price elasticity of demand affect a firmâ??s pricing decisions? c. How does the availability of substitutes affect price elasticity of demand? Provide examples. Please relate th
Suppose the supply for good x is estimated by the following equation: Q(x) supplied = 4 + 0.8P(x) - 0.2P(x)expcted - 0.4W Where; Q(x) supplied = quantity supplied of x P(x) = current average good of x P(x) expected = expected price of good x W = average wage rate Suppose; P(x) = $5 P(x) expected = $6 W = $4.5
If a monopolist is producing a level of output at which demand is inelastic, the firm is not maximizing profits, and increasing output will decrease total revenue. True or False?
The price elasticity of demand for imported whiskey is estimated to be -0.20 over a wide interval of prices. The federal government decides to raise the import tariff on foreign whiskey, causing its price to rise by 20%. Will sales of whiskey rise or fall, and by what percentage amount?
Explain the factors that contribute to the elasticity of goods: 1-discuss in detail the influences of price elasticity of demand 2-explain the factors that contribute to the elasticity of goods 3-discuss how these factors influence consumers to purchases goods or services 4-explain how price elasticity of demand relates to m
1. Assume that the demand for bottled water is price inelastic. Are the following statements true or false? Explain. a. When the price of bottled water decreases, the quantity sold increases. b. The percentage change in the price of bottled water is less than the percentage change in quantity demanded. c. Changes in the price
1. Using data covering May 1998 to October 2000 a student attempted to estimate the demand for meals at a local restaurant. The data included the average price per meal (p), the number of customers (q), and advertising expenditures (a). The following model in levels and logs was estimated: Q = b0 + b1p + b2a + b3s + b4T Th
Please see attached for question. Please show all work and completely explain answer. Price Elasticity and Cross-Price Elasticity fo Demand for Florida Indian River, Florida Interior, and California Oranges Based on the above chart, determine by how much the demand for Florida Indian River oranges would change as a resu
Suppose that a firm maximizes its total profits and has a marginal cost (MC) of production of $8 and the price elasticity of demand for the product it sells is (-)3. Find the price at which the firm sells the product. (Use equation (3012) and to maximize the profits, MR has to equal MC. Please show all work and explain answer
The total operating revenues of a public transportation authority are $100 million while its total operating costs are $120 million. The price of a ride is $1, and the price elasticity of demand for public transportation has been estimated to be -0.4. By law, the public transportation authority must take steps to eliminate its o
You are a painter, and the price of a gallon of paint increases from $3.00 a gallon to $3.50 a gallon. Your usage of paint drops from 35 gallons a month to 20 gallons a month. Perform the following: Compute the price elasticity of demand for paint and show your calculations. Decide whether the demand for paint is elastic, u
The demand function for Good X is defined as Qx = 75 - 2Px - 1.5Py, where Py is the price of Good Y. Calculate the price elasticity of demand using the point formula for Px = 20 and Py = 10. Determine whether demand is elastic, inelastic, or unit elastic with respect to its own price and whether Good Y is a substitute or a compl
BWC sells chrome wheels for automobiles. At a price of $600 per set, they sold about 900 sets per month. The new general manager for this product decided that they needed more revenues and increased price to $800. However BWC is now selling 200 chrome wheel sets per month at the new price. What is the arc price elasticity for th
1. Determine the price elasticity of demand at each quantity demanded using the formula: Percentage change in quantity demanded = (Q2-Q1)/Q1 divided by percentage change in price = (P2-P1)/P1 b. Redo exercise 1a using price changes of $10 rather than $5 c. Plot the price and quantity date given in the demand schedule. Indi
Question 1 Refer to the graphs. In which graph is there no consumer surplus either with or without a per unit tax? A. B. C. D. Question 2 If the supply curve is perfectly elastic the burden of a tax on suppliers is borne: entirely by the suppliers. enti
The demand for Wanderlust Travel Services (X) is estimated to be Qx=22,000-2.5px+4Py-1M+1.5Ax, where Ax represents the amount of advertising spent on X and the other variables have their usual interpretations. Suppose the price of good X is $450, good Y sells for $40, the company utilizes 3,000 units of advertising, and consumer
Economists have estimated the following transportation elasticities. For each pair, explain possible reasons why the elasticities differ. a. elasticity of demand for buses is 0.23 during peak hours and 0.42 during off-peak hours b. elasticity of demand for buses is 0.7 in the short run and 1.5 in the long run c. elasticity or de
Question 1 Compute the approximate elasticity of demand from the following data: Answer .87 1.15 1.5 5.0. Question 2 Refer to the graph. Between points A and B, demand is: Answer inelastic. elastic. unit elastic. perfectly elastic.
Markup on Cost. Brake-Checkup, Inc., offers automobile brake analysis and repair at a number of outlets in the Philadelphia area. The company recently initiated a policy of matching the lowest advertised competitor price. As a result, Brake-Checkup has been forced to reduce the average price for brake jobs by 3%, but it has e
1. A. Current gas is $1.50 a gallon, avg household income is $100,000 a yr. The quantity demanded is 200 million gallons of gas a week. If gas were to increase to $1.68 a gallon the quantity demanded would fall to 158.7 million gallons a week. If household income increased to $110,500 a yr , the quantity demanded would rise to 2
If possible try to write down references please.
Own Price elasticity. Given the data to the right, compute the POINT elasticity of demand of a good as its price goes from $1.00 to $1.50. Show formula and work. Price Quantity 1.00 10 1.50 9 Is the demand for this good in this range elastic or inelastic? If the wage bill per unit of labor (L)
ECONOMICS IN A GLOBAL ENVIRONMENT Part 1 You've been hired by an unprofitable firm to determine whether it should shut down its unprofitable operation. The firm currently uses 50,000 workers to produce 200,000 units of output per day. The daily wage (per worker) is $80, and the price of the firm's output is $25. The cost of o
The Pilot Pen Company has decided to use 15 test markets to examine the sensitivity of demand for its new product to various prices, as shown in the following table. Advertising effort was identical in each market. Each market had approximately the same level of business activity and population. a. Using a linear regression
Two goods have a cross price elasticity of +1.2. a. Would you describe these goods as substitutes or complements? b. If the price of one of the goods increases by 5 percent, what will happen to the demand for the other product, holding constant the effects of all other factors?
The total operating revenues of a public transportation authority are $100 million while its total operating costs are $120 million. The price of a ride is $1, and the price elasticity of demand for public transportation has been estimated to be -0.4. By law, the public transportation authority must take steps to eliminate its o
1. Suppose QD= 60 - 50PC QS= -66 + 90PC (a) Calculate the equilibrium price and quantity. 2. Interpret the results: of the following Mutiple R 0.980 R square 0.961 Adjusted R square 0.952 Standard error 5.255 Observations 12.000 (i) determine significance of
Coca-Cola in dispensers located on a golf course sells for $1.25 a can, and golfers buy 1,000 cans. Assume the course raises the price to $1.26 (assume a penny raise is possible) and sales fall to 992 cans. a. Using the midpoint formula, what is the price elasticity of demand for Coke at these prices? b. Assume the demand fo
PROBLEM ONE The R. J. Jones Company is a publisher of cowboy novels - novels about the great western experience, where men were men, horses were horses, and...well, you get the idea. The corporation has hired an economist to determine the demand for its product. After months of hard work and the submission of a REALLY large bi
Suppose the price of apples rises from $3.50 a pound to $4.00 and your consumption of apples drops from 30 pounds of apples a month to 20 pounds of apples. Calculate your price elasticity of demand of apples. What can you say about your price elasticity of demand of apples? Is it Elastic, Inelastic, or Unitary Elastic? Be sure t