Homework (Ch 07) 10 9 8 PRICE (Dollars per pole per year) .0 0 7 8 9 10 QUANTITY (Thousands of poles) Calculate the price elasticity of demand between points L and M and points N and O using the midpoint method, and fill in the Price Elasticity of Demand column in the following table. Then for each price range, identify if demand is elastic, inelastic, or unit elastic. (Hint: Find the absolute value of the price elasticity of demand to determine whether demand is elastic, inelastic, or unit elastic for each price range.) Price Range between Points Absolute Value of Price Elasticity of Demand Elastic, Inelastic, Unit Elastic Change in Total Revenue Land M N and O 2 1 0 Total Revenue 1 2

4-6 Suppose that the price of croissants rises from $2 to $3 per unit. Use the mid-point approach to get the elasticity. The quantity of orange juice purchased falls from 10 million bottles to 5 million bottles. What is the cross-price elasticity of demand between croissants and orange juice? Are they complements or substitutes? The quantity of jelly purchased increases from 10 million jars to 20 million jars. What is What is the cross-price elasticity of demand between croissants and orange juice? Are they complements or substitutes?

INFO: Yesterday, the price of envelopes was $3 a box, and Julie was willing to buy 10 boxes. Today, the price has gone up to $3.75 a box, and Julie is now willing to buy 8 boxes. What is Julie’s elasticity of demand? _____ (Hint: only a number goes here) Is Julie's demand for envelopes elastic or inelastic? Explain your answer in a complete sentence(s) here:

Fill out the tables by calculating the price elasticity of demand and of supply (use the mid-point formula). Report elasticities with 2 decimals. Demand and Supply Schedule for Good X: Unit price of x Quantity demanded of x Quantity supplied of x Price elasticity of demand of x (2 decimals) Price elasticity of supply of x (2 decimals) $100 0 5 n/a n/a $95 2 4.5     $90 4 4     $85 6 3.5     $80 8 3     $75 10 2.5     $70 12 2     $65 14 1.5     $60 16 1     $55 18 0.5       Demand and Supply Schedule for Good Y: Unit price of y Quantity demanded of y Quantity supplied of y Price elasticity of demand of y (2 decimals) Price elasticity of supply of y (2 decimals) $100 10 40 n/a n/a $90 11 35     $80 12 30     $70 13 25     $60 14 20     $50 15 15     $40 16 10…

When income increases by 10 percent (or numerically, 0.1), quantity demanded moves by 168 units. Assuming the income elasticity of demand is 4. What is the original quantity demanded? (assuming further that this is the point elasticity relative to the original point.) Please make sure you give a numerical answer with no units and/or space or period (.) or comma (,) before or after your answer. Enter your answer here

Assist

Use the demand schedule in the table below to answer the following questions. Use the mid-point method when calculating elasticity. Price ($) 0 1 2 3 4 5 6 7 8 Quantity 56 48 42 35 28 21 14 7 0 Instructions: Round intermediate calculations and round your answers to two decimal places. If you are entering a negative number be sure to include a negative sign (-) in front of that number. a. The price elasticity of demand for a price change from $2 to $3 is: The slope of the demand curve for a price change from $2 to $3 is: b. The price elasticity of demand for a price change from $3 to $5 is: | The slope of the demand curve for a price change from $3 to $5 is: [ c. The price elasticity of demand for a price change from $6 to $7 is: [ The slope of the demand curve for a price change from $6 to $7 is: