3. Ceteris paribus, if the price of a good decreases from $32 to $24, and the quantity demanded of the good increases from 80 to 100, then the price elasticity of demand (using the midpoint method) for that good is: A) B) C) D) Show your work here 0.22. 0.29. 0.78. 1.20. Formula Calculation Answer This good is INELASTIC ELASTIC UNITARY ELASTIC (circle one)

1. Answer both parts of this question. (a) Define the price elasticity of demand and briefly discuss its economic meaning. (b) For demand function x = Ap, show that price elasticity is equal to -7.

Investigate how demand elasticities are affected by increases in demand. Apply the midpoint formula to calculate the demand elasticities. (a) (b) Instructions: In parts a, b, and c, round your answers to two decimal places. Enter your answers as a positive value (absolute value). a. The elasticity of demand for D, between points a and b is 1.80. Given 1 the shift in demand, the elasticity between points a and b in Figure a = b. The elasticity of demand for D, between points c and d is 0.56. Given the shift in demand, the elasticity between points c and d in Figure b = c. In terms of the midpoint formula, what explains the change in elasticities? Compare the elasticities in this problem to those found in the original demand curves. If we compare the elasticities, we can see that an increase in quantity at every price the elasticity. The percentage change in quantity is sr llero. given the higher quantity purchased at every price. Investigate how demand elasticities are affected by…

Suppose that your demand schedule for DVDs is as follows: Price Quantity Demanded (income - $10,000) $8 40 DVDs 10 32 12 24 14 16 16 B Quantity Demanded I (income-$12,000) 50 DVDs 45 30 20 12 a. Use the midpoint method to calculate your price elasticity of demand as the price of DVDs increases from $12 to $16 if (i) your income is $10,000 and (ii) your income is $12,000. b. Calculate your income elasticity of demand as your income increases from $10,000 to $12,000 if (i) the price is $10 and (ii) the price is $14. c. Is the DVDs normal good or inferior good?

QUESTION 1 Encyclopedias were widely used back in the 1970s. Most students and scholars used the encyclopedia to find information on various topics. There was only a small percentage decrease in quantity demanded for encyclopedias in the 1970s when there was a relatively larger percentage increase in price. Today, in the age of the internet, a small percentage increase in price of encyclopedias results in a relatively larger percentage decrease in the quantity demanded. 1. The price elasticiy of demand for encyclopedias in the 1970s was relatively less elastic than today. 2. If the price for encyclopedias increased in the 1970s, the point price elasticity of demand for encyclopedias woud have been greater than 1. 3. The price elasticity of demand for encyclopedias, after the internet, is considered elastic. Which of the above statements are true? O Only 1 is true. O Only 2 is true. Only 3 is true. Both 1 and 2 are true. Both 1 and 3 are true.