If Nothing Bundt Cakes is a normal good, then which of the following could be the value of priceelasticity of demand?-0.9+1.5-1.5There is not enough information tell. Suppose that the price of merlot Napa wines has increased by 15%. If consumers buy 18%merlot Napa wines after the price increase, the total revenue for Napa wine producers willbecause theeffect.effect is greater than theless; drop; quantity; pricemore; drop; price; quantitymore; rise; quantity; priceless; rise; price; quantity

“Since multiple questions have been asked by you, we will solve the first question. Please specify the question number, if you want any specific questions to be answered. Good A is said to be normal if its consumption increases with the rise in Y(income). For example- Suppose consumer is purchasing 20 units of good A when his income is $200 .If price remains constant and income of consumer rises , then good A is said to be normal when the consumption of good A becomes more than 20 units.The elasticity of demand shows the responsiveness of change in Q (quantity demand ) to change in P( price). The formula of Ed elasticity of demand is ; Ed=-% change in Quantiity demanded (Qd)% change in price (P) Note that , Ed is negative due to indirect relationship between P and Q.It means if P increases Q falls and vice-versa keeping other factors changed. For calculating Ed, information on change in Q and P is needed . The above formula will be used to calculate Ed if information on % change in Q and P is given. Thus , alternative d is true . Alternative a , b and c are incorrect because provided information is not sufficient. The information on % change in Q and P is needed to calculate Ed. Thus , option d is true.

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If Nothing Bundt Cakes is a normal good, then which of the following could be the value of price elasticity of demand? ○ -0.9 O +1.5 -1.5 O There is not enough information to tell.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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