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1.) Suppose the gate fee at a national park increases from $25 to $35 while no other variables change. In consequence, the daily quantity of visitors decreases from 3,200 to 2,800. Calculate the absolute value of the price elasticity of demand for this price range (using the average price and quantity).

Answers must be within 0.01 of the true value to be counted as correct. The answer will be a positive number.

2.) Demand is described by P=21-0.03Q+0.001A, where A is the industry-wide spending on advertising. Supply is described by P=7+0.01Q. Calculate the equilibrium quantity if A=10,000.

Answers must be within 1.0 of the actual value to be counted as correct. Do not include spaces or plus signs.

Reference no: EM131554607

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