Due to improvements in the public transportation system

Assignment Help Business Economics

Reference no: EM13999676

You are employed as an economic consultant to the regional planning office of a large metropolitan area, and your task is to estimate the demand for hospital services in the area. Your estimates indicate that the own-price elasticity of demand equals –0.35, the income elasticity of demand equals 0.10, the cross-price elasticity demand for hospital services with respect to the price of nursing home services equals –0.15, and the elasticity of travel time equals –0.22. Use this information to project the impact of the following changes on the demand for hospital services. Show your calculations. a. Average travel time to the hospital goes down by 10% due to improvements in the public transportation system. b. The price of nursing home care decreases by 10%. c. Average real income increases by 4%. d. The hospital is forced to increase its price for service by 10%.

Reference no: EM13999676

Questions Cloud

Supply curve for radiographs by a radiology practice : Given the supply curve for radiographs by a radiology practice, predict how this curve will shift (supply will increase or decrease), if the following occurs which of them will cause a decrease. An increase in the wages of radiological technicians

Is demand elastic or inelastic at this point : Suppose the demand curve is given by Q = 200 - 20P. Answer the following. (a) What is the price elasticity at P = $4? Is demand elastic or inelastic at this point? (b) What is the price elasticity at P = $7? Is demand elastic or inelastic at this poi..

What is the price elasticity of their airline tickets : Suppose that the demand function for regional airline Eastern Shuttle, Inc., is Q = 52,000 - 100P + 500PR + 0.45I where PR is the average price of rail service in their service area and I is the average income in the metro area. What is the price ela..

What part is due to the income effect : Suppose that two goods are perfect complements. If the price of one good changes, what part of the change in demand is due to the (Slutsky) substitution effect and what part is due to the (Slutsky) income effect? Explain.

Due to improvements in the public transportation system : You are employed as an economic consultant to the regional planning office of a large metropolitan area, and your task is to estimate the demand for hospital services in the area. Average travel time to the hospital goes down by 10% due to improvemen..

World bank data for international comparisons : Use only IMF or World Bank data for international comparisons. What is U.S. nominal GDP at the end of 2014 (4th quarter)? What is U.S. real GDP at the end of 2014 (4th quarter)? What is the base year used in calculating U.S. real GDP? Since 1998, in ..

Profit-maximizing level of monolopy output-price and profit : Consider a monopolist with the following demand curve: P=200-2Q. The monopolist faces MCm=ACm=20. Solve for the profit-maximizing level of monolopy output, price, and profit.

What are voluntary export restraint agreements : What are voluntary export restraint agreements? Why do some governments force foreign exporters into them instead of just using quotas or tariffs to restrict imports by the same amounts?

Name one pro and one con of privatizing the USPS : Privatization can be defined as "the process of returning to the private sector property or functions previously owned or performed by government". The basic idea is that there may be some services that the government is providing right now that the ..

User Account

All Pages