Price elasticity of demand

Assignment Help Microeconomics

Reference no: EM131589

Question 1

SkyyMarley Airlines has determined that the price elasticity of demand for two customer segments (Coach and Business Class) is -1.35 and -2.50. Based on their expectations of profitability, SkyyMarley realizes the price of a Coach seat should be $175 (one way). How much should SkyyMarley charge for a Business Class ticket? (

Question 2

Consider that the demand curve for apples is given by Qd = 140 - 5P, where Qd is the number of pounds demanded per year and p is the price per pound. The supply of apples can be described by Qs = 40 + 3P, where Qs is the number of pounds provided.

A What is the equilibrium price?

B What is the equilibrium quantity supplied and demanded?

C Determine the consumer surplus at the equilibrium price.

D Determine the producer surplus at the equilibrium price.

E Evaluate the total surplus at the equilibrium price.

F Now assume that the government imposes a tax of $8 per each pound sold, paid by the consumers,. In this case, what are the price and the consumer surplus?

Reference no: EM131589

Questions Cloud

Capital improvement phase of the project : The governing body of the Order decided that it was no longer feasible to operate the convent, which had been built about sixty years ago, so it was advertised locally for sale.

Mathematical formulation of the model : Mathematical formulation of the model

Optimal translocation strategies : Optimal Translocation Strategies - use stochastic dynamic programming (SDP) to ?nd the optimal decisions

Write an assembly language subroutine : Write an assembly language subroutine

Price elasticity of demand : Price elasticity of demand for two customer segments

Accuracy and completeness of computations : Analysis right and you have to develop a plausible argument to "prove" that your analysis is correct

Java program simulate a network : Java program simulate a network

Computer programming using c language lab : Computer programming using c language lab

Red brand canners : Red Brand Canners Gordon asked Myers about the demand for tomato products for the coming year. Myers replied that they could sell all of the whole canned tomatoes they could produce.

User Account

All Pages