Exercise 1. The demand for your product X has been estimated to be QX = 7, 880 − 4PX − 2PY + PZ − 0.1M where Y and Z are other (related) products. The relevant price and income data are as follows: PX = 10, PY = 15, PZ = 50, M = 40, 000 a. Which goods are substitutes for X? Which are complements? b. Is X an inferior or a normal good? c. How much X will be purchased?

Exercise 1. The demand for your product X has been estimated to be QX = 7, 880 − 4PX − 2PY + PZ − 0.1M where Y and Z are other (related) products. The relevant price and income data are as follows: PX = 10, PY = 15, PZ = 50, M = 40, 000 a. Which goods are substitutes for X? Which are complements? b. Is X an inferior or a normal good? c. How much X will be purchased?

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter5: Price Elasticity Of Demand And Supply

Section: Chapter Questions

Problem 13SQP

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Exercise 1. The demand for your product X has been estimated to be QX = 7, 880 − 4PX − 2PY + PZ − 0.1M where Y and Z are other (related) products. The relevant price and income data are asfollows: PX = 10, PY = 15, PZ = 50, M = 40, 000 b. Is X an inferior or a normal good? d. Graph the demand curve for X given the above information.e. How will the demand curve change if M falls to 35, 000? Is that in line with b.?
5) A certain product has an (own) price elasticity that is elastic, and there is a decrease inthe revenue received. What change in the quantity demanded of a product is necessary to meet theconditions of each situation when there is a 15% increase in the price of that product? Be specific (andsuggest a number).
If the price elasticity of demand for used carspriced between $3,000 and $5,000 is 2 1.2 (usingthe mid-point method), what will be the percentchange in quantity demanded when the price of aused car falls from $5,000 to $3,000?
Your Best Brand Bike Shorts-BBB Shorts have been flying off the shelf. Your chiefeconomist tells you that during the Covid-19 pandemic, the taste for bicycling has shifted. Thedemand curve is much more inelastic. The price elasticity of demand has decreased from:-5.76 to -2.70.”Before the campaign your price was $240 per pair of BBB Shorts. What should bethe new price? Please show calculations.
If quantity demanded of a product changed from 100 to 120 units due to change in price from P10 to P15, determine the value of the price elasticity and the type of product a 0.40 and necessity b. 0.40 and normal good c. -0.40 and necessity d. -0.40 and normal good
The accompanying table lists the cross-price elasticities of demand for several goods, where the percent quantity change is measured for the first good of the pair, and the percent price change is measured for the second good. ( please see image) a. Explain the sign of each of the cross-price elasticities. What does it imply about the relationship between the two goods in question? b. Compare the absolute values of the cross-price elasticities and explain their magnitudes. For example, why is the cross-price elasticity of McDonald’s burgers and Burger King burgers less than the cross-price elasticity of butter and margarine? c. Use the information in the table to calculate how a 10% increase in the price of Pepsi affects the quantity of Coke demanded. d. Use the information in the table to calculate how a 5% decrease in the price of gasoline affects the quantity of SUVs demanded.
Suppose the own price elasticity of demand for good X is -2, its income elasticity is -1, its advertising elasticity is 2, and the cross-price elasticity of demand between it and good Yis -3. Determine how much the consumption of this good will change if: Instructions: Enter your responses as percentages. Include a minus (-) sign for all negative answers. a. The price of good X decreases by 4 percent. percent b. The price of good Yincreases by 10 percent. percent c. Advertising decreases by 3 percent. percent d. Income increases by 2 percent. percent
120 100- Price ($) 80 60 40 20- 0 200 400 Demand Multiple Choice -0.50 -0.75 -1.00 -1.60 -2.00 600 800 1,000 1,200 Quantity In the figure above, what is the point price elasticity of demand when price is $80?
The demand for your product X has been estimated to beQX = 7, 880 − 4PX − 2PY + PZ − 0.1Mwhere Y and Z are other (related) products. The relevant price and income data are asfollows: PX = 10, PY = 15, PZ = 50, M = 40, 000a. Which goods are substitutes for X? Which are complements?b. Is X an inferior or a normal good?c. How much X will be purchased?d. Graph the demand curve for X given the above information.e. How will the demand curve change if M falls to 35, 000? Is that in line with b.?
To say there is an elastic demand for a product means that O consumers are not very responsive to a change in the price of the product. there are relatively few substitutes, few competitors, and a short time period under consideration. O there is a positive relationship between price and total revenue. O consumers are very responsive to a change in the price of the product.
If the cross-price elasticity of demand between two goods is +2, how would youdescribe the relationship between the two goods?
A) If the cross-price elasticity of demand for hamburgers and hotdogs is positive, then the two goods are substitutes. Ture or False? B) Suppose that when the price of a pizza is $10, Bill buys 7 pizzas per month, when the pizza price rises to $14, Bill buys 3 Pizzas per month. Calculate bill's price elasticity of demand for pizzas. a) 12/5 b) 5/12 c) I don't have enough information to calculate it d) 1/3 e) 4/5 f) 1 g) 3 h) 5/4 i) 0