Is demand elastic or inelastic at this point

Assignment Help Business Economics

Reference no: EM13999679

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 point? (c) At what price is revenue maximized (where demand is unit elastic)? (d) Illustrate your answers with a labeled demand curve.

Reference no: EM13999679

Questions Cloud

How many speedometers must the company sell to break even : The Automotive Supply Company has a small plant that produces speedometers exclusively. Its annual fixed costs are $30,000, and its variable costs are $10/unit. It can sell a speedometer for $25. How many speedometers must the company sell to break e..

What is the price elasticity of supply : Suppose that, when the average price of shoes increases by 5%, the quantity supplied of shoes increases by 8%. What is the price elasticity of supply? Is the supply of shoes elastic or inelastic?

Differences of marshallian-hicksian-slutsky demand curves : Explain the differences of Marshallian, Hicksian, Slutsky demand curves. You can explain verbally or you can use the graphs. Suppose that the price of good 2 increases from the initial prices. Explain Slutsky substitution effect and Hicksian substitu..

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 ..

User Account

All Pages