Use arc elasticity to find the price elasticity of demand, Microeconomics

Assignment Help:

Elasticity-

a) The price of good X goes up by 2.75%, the quantity demanded of good Y goes from 10,500 units to 25,000.  What is the Exy?  What does that number mean?  What is the relationship between these two goods?

b) National incomes have gone from and average of $36,000 last year to $34,000 this year.  We see that the amount of widgets has changed from 102,500 last year to 105,000 this year.  What is the income elasticity of widgets?  What does this number mean? What type of good is a widget?

504_Use Arc Elasticity to Find the Price Elasticity of Demand.png

c) Use Arc Elasticity To Find The Price Elasticity Of Demand.  What does this number mean? Is it in the elastic or inelastic range? What would happen to total revenue with the price reduction?

d)  Northern California Pro Bikes hired an economist to make predictions about the firm's sales and total revenue.  The economist found that the price elasticity of demand for Pro Bikes is 0.8.  Should the firm increase or decrease the price of Pro Bikes?  Why?


Related Discussions:- Use arc elasticity to find the price elasticity of demand

Demand, demand elasticity

demand elasticity

Example on indifference curves and budget lines, Since 1990, real income ha...

Since 1990, real income has increased rapidly , yet the average number of children per family has decline ." Three possible explanations for this process are given below.

Determine the optimal number of ads -regression, You work in the front offi...

You work in the front office of the Spokane Indians, a minor league baseball team that plays in the Northwest League of Minor League Baseball. Your boss wants to know the different

Long run eq, The raspberry growing industry is a perfectly competitive indu...

The raspberry growing industry is a perfectly competitive industry. The firms in the industry have a U-shaped LAC, minimum average cost is $8 and the minimum efficient scale is 4 u

Elasticities of demamnd, The demand for soft drinks has been estimated asQx...

The demand for soft drinks has been estimated asQx 20PX 0.25PY0.45M 2 Determine the own, cross and income price elasticities of demand. Interpret your results.

Market structures, #question.contrast the long run equilibrium position of ...

#question.contrast the long run equilibrium position of monopolistic competition firm and oligopoly.

Duality theorems, Duality Theorems: The relationship between the direc...

Duality Theorems: The relationship between the direct and indirect utility functions may be described by a set of duality theorems. The following illustrative theorems are pro

Cost in the long run, Cost in the Long Run Cost minimization with the V...

Cost in the Long Run Cost minimization with the Varying Output Levels -A firm's expansion path shows minimum cost combinations of labor and capital at each level of output.

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd