Calculate the price elasticity of demand for airplanes

Assignment Help Econometrics
Reference no: EM13223307

The demand for Airplanes is represented by this equation : Qd=53,230 - .8V+.05Vr-3,600Vh + 4T

V is the Price for Airplanes
Vr is the price per trip in boats
Vh is the price per gallon of gasoline
T is the average income of a consumer

Imagine that the current price per boat is $5.
That the price per gallon of gas is $10
The average income is $50
The equilibrium price for Airplanes is $60,000

After getting the market-equilibruim quantity of airplanes.

Calculate : price elasticity of demand for airplanes, income elasticity of demand for airplanes, cross-elasticity of demand relative to boat transportation, and cross-elasticity of demand relative to gas.

Reference no: EM13223307

Questions Cloud

Determine what is the optimal number of fig leafs : What Gimbo most enjoys for dinner is eating fig leafs (F) and to accompany his meal with nothing better than an Arak (A) drink on the rocks. His utility function is represented by this equation : U=33(F)(A^2). Gimbo has $100 to spend on dinner dur..
Find an example of a recent major decision : Find an example of a recent major decision that was made based on assumptions that turned out to be incorrect.
At lies are present in the tangled webs considered here : What lies are present in the "tangled webs" considered here? How were they used? How were they justified by those who they executed them? Who was harmed by them? Which lies were most harmful?
Defined as the relationship between a corporation : Corporate governance can be defined as the relationship between a corporation and its shareholders.
Calculate the price elasticity of demand for airplanes : The demand for Airplanes is represented by this equation : Qd=53,230 - .8V+.05Vr-3,600Vh + 4T V is the Price for Airplanes Vr is the price per trip in boats Vh is the price per gallon of gasoline T is the average income of a consumer
Comment on two recent wal-mart initiatives : Comment on two recent Wal-Mart initiatives from the standpoints of: a) Strategy and b) PR
What measures can be taken to provide more capacity : What measures can be taken to provide more capacity at a bottleneck work center?
What is the equilibrium price and quantity in the case : 1. In the beginning, 74 firms are in this competitive market. All firms are equal. (a) What is the total market supply curve when 74 such firms are producing at the same time (b) What is the equilibrium price and quantity in this case (c) What is the..
What are the next three stages : It is generally agreed that HR planning involves four distinct phases or stages, the first being situation analysis or environmental scanning. What are the next three stages?

Reviews

Write a Review

Econometrics Questions & Answers

  What is the probability that you drew the ball from bag a

There are two bags, each each containing 100 ping-pong balls. Bag A contains 100 red balls and no black ball, and bag B contains 20 red and 80 black. you are are blindfolded and reac into a bag.There is a .5 probability it is bag A .

  Why the firm wants to consolidate all its manufacturing

Mexico Taiwan Canada Hourly wage rate $1.50 $3.00 $6.00 Output per person 10 18 20 Fixed overhead cost $150,000 $90,000 $110,000 a. Given these figures, is the firm currently allocating its production resources optimally

  Use increment to value the scale-up option

A firm has undertaken a project in which the firm has the option to invest in additional manufacturing and distribution resources (or scale up). The project's current value is V0 = $25M. Anytime over the next three years, the firm can invest an add..

  What is the expected return on the equity

Company A just paid a $3.00 dividend per share. The dividend is expected to grow at a 4% rate indefinitely. The beta of the stock of Company A is 1.5. The market risk premium is 8% and the risk-free rate is 3%. (a) What is the expected return on t..

  Do you anticipate earning a profit or a loss

You are a manager T Glass, Inc.- a mirror and window supplier. Recently, you conducted a study of the production process for your single-side encapsulated window. The results form the study are summarized in the table below, and are based on 5 uni..

  At what level should phone company set the charges

An upstart phone company has only two potential large customers, Firm A and Firm B. Firm As monthly demand for phone calls is Q1 = 2; 800 - 200p and Firm 2s is Q2 = 5; 000 - 100p. The marginal cost of providing a phone call is 6 cents.

  What is jeffs ppc for test score versus hours playing

jeff has 4 hours that he can choose to spend either studying for a test or playing a new video game. If he spends all of time studying, he can score a 92 on the test. If he plays for 1 hour, his test score falls 5 points.

  What is the minimum level of n that will achieve separation

In a Good job, a qualified worker produces 100 units and an unqualified worker produces 0. There is enough demand for workers for each type of job; companies must pay what they expect the appointee to produce.

  Interpret the regression equation

State carefully the ceteris paribus assumption in this case. Do you think this simple regression of Y on X satisfies that assumption? Why or why not?

  To compound monthly which options is more favorable

A local car dealer is advertising a 24 month lease of a sport utility vehicle for 520 payable at the beginning of each month. the lease requires a 2500 down payment plus a 500 refundable security deposit that is refunded at the end of the 24 month..

  How to derive an equation that relates average cost

A country produces manufactured goods, whose industry is characterized by increasing returns to scale, monopolistic competition, and firms that differentiate their products. Firms are symmetric all firms have identical costs functions and demand f..

  What number of units of annual production will company have

Company A has fixed expenses of $15,000 per year and each unit of product has a $0.002 variable cost. Company B has fixed expenses of $5,000 per year and can produce the same product at a $0.05 variable cost. At what number of units of annual prod..

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!

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