User Account

All Pages

Calculate the elasticity of short-run demand

Assignment Help Microeconomics
Reference no: EM133271948

Question 1. a) The initial price of a chip is $410 and at this price the number of chips sold per ear equal 36 million. However, when the price of a chip falls to $390 the quantity demanded to 44 million chips a year. Using this information calculate the price of elasticity of demand.

b) If the price falls from $500 a chip to $300 a chip and the quantity demanded rises from 0 to 80 million chips per year respectively, what is the price elasticity of demand.

Question 2 You have been hired as an economic consultant by Intel and given the following world demand schedule for intel chips: use mid point formula to solve

Price (dollars per chip)
 
Quantity Demanded (millions of chips per year)
 
100
 
60
 
200
 
50
 
300
 
40
 
400
 
30
 
500
 
20

Your advice is needed for, the following questions:

(Change in Q / sum of q1+q2/ 2) divided by (change in p / sum of p1 +p2 /2) mid point formula

10 / (60+50/2) divided by (100 / (100+200/2) = - 0.28 100 -200 6000
- 0.56 10 000
- 1 12000
- 1.8 12000
10000

a) What will happen to Intel's total revenue if the price of a chip falls from $400 to S300? Revenue stays the same
b) What will happen to Intel's total revenue if the price of a chip falls from $300 toS200?
c). What is the price at which Intel's total revenue is maximized?
d) At an average price of $350, is the hand for chips elastic or inelastic? Use the total revenue test and your answer to part a) to answer this question.
e) At an averageprice of $250, is the demand for chips elastic or inelastic? use the total revenue test and your answer to part b) to answer this question.
f) What is the elasticity of demand for chips at the price that maximizes Intel's revenue?

Question 3. The following table gives some data on the demand for long-distance telephone calls:

Price (cents/minute)
 
Qd in the Long-Run Qd in the Short-Run(millions of minutes/day)
 
(millions of minutes/day)  
10
 
700
 
1000
 
20
 
500
 
500
 
30
 
300
 
0

At a price of 20 cents a minute.

a) Calculate the elasticity of short-run demand.

b) Calculate the elasticity of long-run demand.

c) Is the demand more elastic in the short-run or the long-run?

Question 4. State the sign (positive "+" or "-" negative) of the following elasticities:

a) The cross elasticity of demand for ice cream with respect to the price of frozen yogurt.

b) The cross elasticity of demand for corn ready to be popped with respect to the price of popcorn machines.

c) The income elasticity of demand for Caribbean cruises.

d) The income elasticity of demand for toothpaste.

Question 5 Draw the following demand curies:

a) Perfectly Inelastic

b) Unit Elastic

c) Perfectly Elastic

Reference no: EM133271948

Questions Cloud

Create a interest for a activities with the use of ar-vr app : Design an inbound digital media strategy to raise awareness and create interest for A activities with the use of AR/VR app.
Explain the marketing strategy : Explain the marketing strategy and select the best marketing strategy for Nebih Jaya Sdn Bhd.
Construct a market segment for each of these markets : Using the above list of market segment ideas, construct a market segment for each of these markets.
Elements of the imc campaign : You have been hired to develop an IMC campaign for Nike. Determine how you would use social media to drive traffic to the other elements of the IMC campaign.
Calculate the elasticity of short-run demand : What will happen to Intel's total revenue if the price of a chip falls from $400 to S300? Revenue stays the same - Calculate the elasticity of short-run demand
Calculate the market penetration-brand penetration : Calculate the market penetration, brand penetration and penetration share. Interpret the results.
List three different scenarios that could occur : List three (3) different scenarios that could occur when working with individualised plans that would go beyond the scope of your own knowledge
Define the core target audience : Define the core target audience. Outline the communications objectives you feel were at the base of this campaign. Were they achieved?
Review the various quantitative research designs : Review the various quantitative research designs presented in the textbook readings and research articles. Is the design appropriate for the study

Reviews

Write a Review

Microeconomics Questions & Answers

  The free rider problem

Question: Explain why the free rider problem makes it difficult for perfectly competitive markets to provide the Pareto efficient level of a public good.

  Failure of the super committee is good thing for economy

Some commentators have argued that the failure of the “Super committee” is good thing for the economy?  Do you agree?

  Case study analysis about optimum resource allocation

Case study analysis about optimum resource allocation: -  Why might you suspect (even without evidence) that the economy might not be able to produce all the schools and clinics the Ministers want? What constraints are there on an economy's productio..

  Fixed cost and vairiable cost

Questions:  :   Which of the following are likely to be fixed costs and which variable costs for a chocolate factory over the course of a month?  Explain your choice.

  Problem - total cost, average cost, marginal cost

Problem - Total Cost, Average Cost, Marginal Cost: -  Complete the following table of costs for a firm.  (Note: enter the figures in the  MC   column  between  outputs of  0 and 1, 1 and 2, 2 and 3, etc.)

  Oligopoly and demand curve problem

Problem based on Oligopoly and demand curve,  Draw and explain the demand curve facing each firm, and given this demand curve, does this mean that firms in the jeans industry do or do not compete against one another?

  Impact of external costs on resource allocation

Explain the impact of external costs and external benefits on resource allocation;  Why are public goods not produced in sufficient quantities by private markets?  Which of the following are examples of public goods (or services)? Delete the incorrec..

  Shifts in demand and movements along the demand curve

Describe the differences between shifts in demand and movements along the demand curve. What are the main factors which can shift the demand curve? Explain why they cause the demand curve to shift. Use examples and draw graphs to support your discuss..

  Article review question

Article Review Question: Read the following excerpts from the article "Fruit, veg costs surge' by Todd, Dagwell, published in the Herald on January 25th 2011 and answer questions below:

  Long-term growth, international trade & globalization

Long-term Growth, International Trade & Globalization:- This question deals with concepts such as long-term growth, international trade and globalization. Questions related to trade deficit, trade surplus, gains from trade, an international trade sce..

  European monetary union (emu) in crisis

"Does the economic bailout of Spain and Greece spell the beginning of the end for the European Monetary Union (EMU)?"

  Development game “settlers of catan”

Read the rules of the game, the overview and the almanac for the Development Game "Settlers of Catan"

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd