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

International trade, compare and contrast adam smith''s theory of absolute ...

compare and contrast adam smith''s theory of absolute advantage theory and david ricardo''s comparative advantage theory of international trade.

Currency unions and optimum, CURRENCY UNIONS AND OPTIMUM: This Section...

CURRENCY UNIONS AND OPTIMUM: This Section explains the working of monetary unions and common currency areas. The Section also examines the case for and against optimum currenc

Oligopoly, large firms charge the price which is higher than the small firm...

large firms charge the price which is higher than the small firms, contruct the diagram

Profit maximizing quanitity, how do I determine the profit-maximizing quant...

how do I determine the profit-maximizing quantity of a firm for different market prices when only given TFC, TVC, and the market price

Production having two outputs - economies of scope, Production having Two O...

Production having Two Outputs -Economies of Scope *  Economies of scope exist when joint output of a single firm is greater than the output which could be achieved by two diffe

Fundamental unit of individual economic behaviour, Households: The fundamen...

Households: The fundamental unit of individual economic behaviour. Households offer labour supply to labour market, make consumer purchases,earn income (from employment and other s

Determinants of social demand for education - excellence, Determinants of S...

Determinants of Social Demand for Education - Excellence Apart from the three considerations identified by Prof. Musgrave for public investments in education and discussed abo

Demand and supply components of the sector, The objective of the Government...

The objective of the Government of Mauritius, as announced in the Budget Speech 2007/2008, is to target 2 million tourists by 2015. (a) Critically assess whether the target of

Sales revenue maximization model , What are the major differences between t...

What are the major differences between the equilibrium of profit maximiser and sales revenue maximiser?

How much economic production had fallen, The idea for the national accounts...

The idea for the national accounts came during the 1930s depression in the U.S., when decision-makers wanted to get a better sense of by how much economic production had fallen. Si

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