User Account

All Pages

Calculating and interpreting elasticity

Assignment Help Microeconomics
Reference no: EM13935134

Calculating and Interpreting Elasticity
This analysis assessment has three parts. While responding to each part, make sure that you show the formula prior to your complete calculation. Listing only the final answer will not earn credit.
Part I. Using the midpoint method, calculate and interpret the price elasticity of demand for the following situation:
  1. When the price of oranges increases from $1.00 per pound to $1.50 per pound, quantity demanded falls from 500 pounds to 400 pounds. Calculate the price elasticity of demand. Is the demand for oranges price elastic, inelastic, or unit elastic? Explain.
  2. Calculate total revenue before and after the price change. How does that relate to the elasticity interpretation? Nancy's income increases from $20,000 to $30,000 and her consumption of spaghetti changes from 10 pounds per month to 2 pounds per month. Calculate the income elasticity of demand.
  3. Interpret the result. The quantity of Pepsi purchased rises by 15% when the price of Coca-Cola rises by 30%. Calculate the cross-price elasticity.
  4. Interpret the result.
Part II. Given the following information, calculate the income elasticity of demand using the midpoint formula. Part III. Given the following information, calculate the cross-price elasticity of demand. Submission Requirements:
  • Formulas and calculations must be shown along with the final correct answer. Attach a Word document that contains all answers.
  • Format: Double line space, Times New Roman, 12-point font

Reference no: EM13935134

Questions Cloud

Compare two examples of intermodal container : Provide a 2000 word written paper choosing ONE of the three topic choices given below: (1) Compare two examples of intermodal container and freight technology. (2) Discuss how new container tracking devices will improve international intermodal trans..
Shares outstanding and target capital structure consisting : Hastings Corporation is interested in acquiring Vandell Corporation. Vandell has 1 million shares outstanding and a target capital structure consisting of 30% debt. Vandell's debt interest rate is 7.3%. Vandell's free cash flow (FCF0) is $2 million p..
List three actions that hulmut can take to ensure the rating : List three actions that Hulmut can take to ensure the ratings indicate that customers are very satisfied.
What is the value of the unlevered firm : Hastings Corporation is interested in acquiring Vandell Corporation. Vandell has 1 million shares outstanding and a target capital structure consisting of 30% debt. Vandell's debt interest rate is 7.8%. What is the value of the unlevered firm? What i..
Calculating and interpreting elasticity : This analysis assessment has three parts. While responding to each part, make sure that you show the formula prior to your complete calculation. Listing only the final answer will not earn credit.
What is the market value of the firm after the IPO : 1. Your firm has 10 million shares outstanding, and you are about to issue 5 million new shares in an IPO. The IPO price has been set at $20 per share, and the underwriting spread is 7%. The IPO is a big success with investors, and the share price ri..
Automobile replacement analysis : You are considering the purchase of a new car. You presently own a red 2013 Chevrolet Camaro 2door LS Coupe with 60,000miles. It has 3.6 liter V6 engine with manual 6 speed transmission. Based on the replacement value analysis, what is the trade-in v..
Know how to do econ : Good Evening, I need an expert Econ 101 person to help me take a quiz. I had three chances to take the quiz, I'm down to two! I need someone who will help with each question, ensuring that I answered it correctly because they know how to do Econ, not..

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