A ON JENN 28 24 20 16 12 0 P D1 S D2 048 8 12 16 20 24 Q a) substitutes. b) complements. c) inferior goods. d) public goods. 2. If demand for this product increased from D1 to D2 as a result of a decrease in price of a related product, then these two produc e
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- Transport economists Lasse Fridstrøm and Vegard Østli studied the demand for cars in Norway between 2002 and 2016. Regarding gasoline-powered cars, the own-price elasticity was −1.094, and the cross-price elasticities with respect to the prices of gasoline, electricity, and electric cars were −0.71, 0.06, and 0.19 respectively. As for electric cars, the own-price elasticity was −0.99, and the cross-price elasticities with respect to the prices of electricity, gasoline, and gasoline-powered cars were −0.18, 0.38, and 0.35 respectively.a. Referring to the above data, discuss whether gasoline cars and electricity are substitutes or complements.b. Electric cars are more expensive than gasoline cars. Compare the incomes of people who buy electric cars vis-à-vis those who buy gasoline cars.c. Considering the buyers’ incomes, explain why the demand for electric cars is less price elastic than the demand for gasoline cars.d. Why would the short-run demand for gasoline cars be less elastic with…v Question Completion Status: 28 24 20 S2 16 S1 ND1 D2 01 0 4 4 8 12 16 20 24 Q 14. If this figure depicts the market for product X, and the demand for product X changed from D2 to D1 as a result of an increase in the price of a related product Y from $45 to $55, the cross price elasticity of demand for product X (calculated at Px = $18) is and the two products are O "1/6, substitutes" "6, substitutes" O "-6, complements "1/6, complements" QUESTION 15. Click Save and Submit to save and submit. Click Save All Answers to save all answers. Save All Answers 46 24 L AUG P 13 21 .... 284The price of product A is cut by 25%. As a result, the quantity demanded of product B falls by 40%. The cross-price elasticity of demand between product A and product B is _____, and they are _____. Select one: a. 1.6; substitutes b. 1.6; complements c. 0.625; substitutes d. 0.625; complements
- Sipho runs a local kiosk specialising in slogan t-shirts. At the end of summer, he hosts aclearance sale and decreases the price of t-shirts from R150 to R120 per unit. The sales logindicates the quantity of t-shirts demanded increased from 60 to 80 units.(a)Calculate the price elasticity of demand over the range of the linear demand curve for tshirts.(b)What type of elasticity is applicable? Explain.Suppose the income elasticity of demand for ProductZ is -0.8 and the cross price elasticity of demand of Product Z with respect to price of Product M is 2.0. Alex owns a factory producing Product Z. a) State and explain the type of good Product Z is. b) Assuming price of Product Z remains unchanged, state and explain using relevant calculations, specifically how the total quantity demanded of Product Z will be affected when the income of the population decreases by 10%, and the price of Product M increases by 15%.Kk177. Suppose the market demand function is given as;Qd = 5I + 10P_1 − 0.4P^2where I is income in $1000 and P1 is price of a related good.(a) What is the relation between these two goods?(b) Calculate the income, cross price, and own price elasticities of demand if I = $50,000, P1 = $10 and P = $20.(c) At what price is demand unit elastic if I = $50,000 and P1 = $10?
- MCQ 48 If the government imposes a tariff on imports, the subsequent rise in the market price of the imported product is likely to be greatest when: A demand is price elastic, and supply is price inelastic demand is perfectly price elastic, and supply is price inelastic C there are many substitute goods available D both demand and supply are price elastic E I do not want to answer this question. demand is price inelastic, and supply is more price elasticments/497668 ignments > 25. Elasticity of Demand sticity of Demand Interpret elasticity of demand Question Suppose that the price p of a product and its demand x are related through the price-demand equation x+ 400p = 8,000. We're interested to find all the values of p such that the demand is inelastic. Which of the following gives the correct region? Select the correct answer below: O {plp 10} Previous 43% 2P PrtSc Insert Delete F6 F7 F8 F9 F10 F11 F12 F3 F4 F5 23 ) Backspac 3 4. 8 9- { + II И %24If the cross-price elasticity of demand between good A and good B is -1.25, then the goods are A substitute goods. B complimentary goods. (c) not related to each other at all.
- Question 9 Suppose that the average income of a consumer named Wian decrease from R18000 to R12000. As a result, the quantity of product A demanded by Wian increases from 200 units to 280 units. Use the ARC (midpoint) formula to calculate and classify the income elasticity of demand for product A. Based on your answer in 9.1, name and define the type of product. 9.1. 9.2.The price of product A is cut by 30%. As a result, the quantity demanded of product B rises by 40%. The cross-price elasticity of demand between product A and product B is _, and they are O -0.75; substitutes O -1.33; complements O -1.25; complements O 1.25; complementsA manufacturer sells two products, A and B and had raised the prices of the two products recently to cover the higher production costs. The price and quantity for each product before and after the price change is given in the table below. Product A B Initial Price $250 $600 Initial Quantity demanded 28050 New Price $300 $750 New Quantity demanded 20045 Calculate the price elasticity of demand for both products using the midpoint method. Comment on their elasticities and explain two (2) possible reasons why they are different. What should the manufacturer do to the prices of the two products if the objective is to earn more revenue?