Describe how the necessity of a good and the availability of substitutions impact price elasticity.

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Price elasticity of demand is simply percentage change in the quantity demanded for the product if there is 1% change in the price of the product. The demand is elastic if the absolute value of price elasticity is greater than 1 i.e. 1% change in price leads to more than 1% change in quantity demanded. On the other hand, the demand is called inelastic if the absolute value of the price elasticity is less than 1 i.e. 1% change in price leads to less than 1% change in quantity demanded.

Now think intuitively how the price elasticity will be ...

Consider a service that you buy frequently. (Can use pedicure 2 times per month at $50 for graph and calculation)
a. Suppose that the price was 5% lower and all other factors do not change. How much more would you buy each year?
b. Using this information, calculate the own-priceelasticity of your demand.

Quantity PriceElasticity
Demanded
100 $ 5
80 $10
60 $15
40 $20
20 $25
10 $30
1. Determine the priceelasticity of demand at each quantity demanded using the formula % chg in QD divided by % chg in price.
2. Redo #1 using price changes of $

The demand schedule for the product 'xyz' is given below:
Price($) Quantity demanded
3 20
4 15
5 11
6 9
7 7
Task: Based on the above data, solve the questions given below:
Compute the point priceelasticity of demand for an increase in the p

With respect to the priceelasticity of demand, construct a graph using the data in figure 1. Illustrate the ranges on the demand curve that indicate elastic, inelastic, and unitary elasticity. Explain your answers. Enter non-numerical responses in the same worksheet using tax boxes.
Quantity total

Demand for cassettes can be characterized by the following point elasticities:priceelasticity =-2,cross priceelasticity with aaa batteries is -1.5, and income elasticity =3. please explain the following statement.
a. A 3% price reduction in cassette players would be necessary to overcome the effects of a 2% decline in inco

The demand for company X product is given by Q(x) = 12 - 3P(x)+ 4P (y)
Suppose good X sells for $3.00 per unit and good Y sells for $1.50 per unit.
a. Calculate the cross-priceelasticity of demand between goods X and Y at the given prices.
b. Are goods X and Y substitutes or complements?
c. What is the own price elastici

Suppose the own priceelasticity of demand for good X is -3, its income elasticity is 1, its advertising elasticity is 2, and the cross-priceelasticity of demand between it and good Y is -4. Determine how much the consumption of this good will change if:
Instructions: Enter your answers as percentages. Include a minus (-) si