What is the price elasticity of demand if the price of good

Assignment Help Business Economics

Reference no: EM13733306

The market demand for a product is given by: Q= 300 - 5P + Y

Where why is average consumer income? The current level of income is 200.

A. What is the price elasticity of demand if the price of the good is $20.00?

b. What happens to the price elasticity of demand if income increases to 300 (all else remaining constant)?

c. What is the income elasticity of demand if the price of the good $20 and income is $300? Is the good normal or inferior?

d. Suppose the market was controlled by a monopolist who wanted to maximize its total revenue. What would be the price the monopolist should charge? (Assume the income level is 300.)

Reference no: EM13733306

Questions Cloud

Statements relate to the AD–AS model : Describe how the following statements relate to the AD–AS model:

Find the amount of consumer surplus and producer surplus : Suppose you have the following demand and supply schedules: Qd = 900-10p+2Y and Qs= -50+25P where Qd and Qs are quantity demanded and supplied, respectively, Y is average income (in 1000s) in the area and P is the price of the good. Suppose Y=50. Fin..

Extensive financial and commercial networks linking nations : What are some of the main advantages and disadvantages of the extensive financial and commercial networks linking nations today?

About the potential benefits and costs of diversification : Economists argue about the potential benefits and costs of diversification. For instance, while diversification can certainly help company to promote new products, at the same time through the merger of two firms it can be more expensive to develop c..

What is the price elasticity of demand if the price of good : The market demand for a product is given by: Q= 300 - 5P + Y. Where why is average consumer income? The current level of income is 200. What is the price elasticity of demand if the price of the good is $20.00?

The reservation wage is shown : Graphically, the reservation wage is shown by:

Individual is faced with two goods-income and leisure : Suppose an individual is faced with two goods: income and leisure. The basic wage rate is 8 dollars per hour but if the individual works more than 8 hours a day, he or she get's an overtime pay of $12. Draw the budget line for this individual.

What is the determinant that has caused the shift : Find an article (newspaper, magazine, or online) that identifies a shift change in supply and demand. Use the article to answer the questions: Indicate if the shift has already occurred, maybe occurring currently, or may occur in the future. Is the m..

Focusing only on the price effect and ignoring the quantity : Skyscraper City has a subway system, for which a one-way fare is $1.50. There is pressure on the mayor to reduce the fare by one-third, to $1.00. The mayor is dismayed, thinking that this will mean Skyscraper City is losing one-third of its revenue f..

User Account

All Pages