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

Difficulties in measuring cost, Difficulties in Measuring Cost  1) Outp...

Difficulties in Measuring Cost  1) Output data may represent an aggregate of different type of products.  2) Cost data may not include opportunity cost.   3) Allocating c

Define average total cost and average variable cost, Define Average Total C...

Define Average Total Cost and Average Variable Cost Average Total Cost:    The amount spent on producing every unit of output. The average cost is calculated by dividing the t

Home work, #question. what is the underlying reason for the law of increas...

#question. what is the underlying reason for the law of increasing opportunity cost?

Price elasticity of demand , Describe what the price elasticity of demand i...

Describe what the price elasticity of demand is and why it is of interest in examining markets.  Might it be beneficial in the airline industry?  Why?

Theory of firm, critically analysis firm theory of profit maximization?

critically analysis firm theory of profit maximization?

High risk individuals, a) Describe and derive the equilibrium contract offe...

a) Describe and derive the equilibrium contract offered to high risk individuals.                                             b) Describe and derive the equilibrium contract offe

Determine the optimal order size, A major component of the costs of many la...

A major component of the costs of many large firms is the cost associated with ordering and holding inventory. If the yearly demand for the good is D and the size of each order pla

Homework, If a person literally had “nothing else to do,” (a) What would b...

If a person literally had “nothing else to do,” (a) What would be the opportunity cost of doing this homework?

International finance corporation, INTERNATIONAL FINANCE CORPORATION: ...

INTERNATIONAL FINANCE CORPORATION: The IBRD loans are available only to member-country governments or with the guarantee of member-country governments. Further, IBRD can only

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