Instead of assuming a linear demand curve, suppose we assume that demand is char- acterized by the following demand function qD = 13.572P −1.5 (a) Suppose the current price is $5. What is the price elasticity of demand at this price? (b) Over what range of prices is demand elastic? Inelastic? Unit elastic?

Suppose the demand function for a firm's product is given by In Qxd = 7 -1.5 In Px + 2 In Py-0.5 In M + In A where: Px = $15 Py = $6 M = $40,000, and A = $350 a. Determine the own price elasticity of demand, and state whether demand is elastic, inelastic, or unitary elastic. Own price elasticity: Demand is: (Click to select) b. Determine the cross-price elasticity of demand between good X and good Y, and state whether these two goods are substitutes or complements. Cross-price elasticity: These two goods are: (Click to select) c. Determine the income elasticity of demand, and state whether good X is a normal or inferior good. Income elasticity: Good X is: (Click to select) d. Determine the own advertising elasticity of demand.

Given the demand function D(p)=√175 - 2p, Find the Elasticity of Demand at a price of $87 At this price, we would say the demand is: O Unitary Inelastic Elastic Based on this, to increase revenue we should: Lower Prices Raise Prices Keep Prices Unchanged

am. 111.

. Determinants of the price elasticity of demand Consider some determinants of the price elasticity of demand: • The availability of close substitutes • Whether the good is a necessity or a luxury • How broadly you define the market • The time horizon being considered   A good without any close substitutes is likely to have relatively...........................( elastic/inelastic)    demand, since consumers cannot easily switch to a substitute good if the price of the good rises.   A good’s price elasticity of demand depends in part on how necessary it is relative to other goods. If the following goods are priced approximately the same, which one has the least elastic demand?(multiple choice)   a) Sports car   b) A heart valve for heart attack victims     The price elasticity of demand for a good also depends on how you define the good. Organize the goods found in the following table by indicating which is likely to have the most elastic…

Question 6 = Given the demand function D(p) = /350 - 2p, Find the Elasticity of Demand at a price of $11 At this price, we would say the demand is: Inelastic O Elastic O Unitary Based on this, to increase revenue we should: O Keep Prices Unchanged O Lower Prices Raise Prices

A 10% increase in the price of a good results in a 4% increase in total revenue. From this information, it can be concluded that the demand over this range of prices A C E is inelastic has increased by 40% has increased by 14% B D neun on is upward sloping has a price elasticity of demand equal to 2.5 /1

The Dixie Chicken currently sells 3,000 burger platters per month for $8, and the own-price elasticity for this platter has been estimated to be -1.25. If Dixie Chicken raises prices by 75cents, how many platters will be sold? Round to the nearest whole number.

Given the demand function QD = 18 − 3P, answer the following ques-tions.(a) Calculate the price elasticity of demand if the price increases fromP1 = 2 to P2 = 5 using the midpoint method.(b) Calculate the point price elasticity of demand at QD = 13.5.(c) At which price/quantity is demand unit elastic?(d) At which price/quantity is demand perfectly elastic and perfectlyinelastic, respectively?