John Stain estimates that the demand curve for his PaneMaster insulated windows is 350-2P given by Q Currently, John is charging $150 per window, including installation. John is considering a sale. Find the price elasticity of demand for PaneMaster Windows and comment on the advisability of a sale. = a) EQp = -0.67 so the consequences of a sale cannot be determined b) EQp = -0.67, so a sale would increase profits c) Eqp=-6.00, so the consequences of a sale cannot be determined d) EQp = -6.00, so a sale would increase profits

38. Suppose that a consumer's annual(income decreased by RO 300, causing a 15% decrease in the quantity of beef the consumer demands. If the consumer has an Ancome elasticjty of demand.of 1.0 for beef, what is her new income? a. RO 2700, b. RO 3000. C. RO 1700 d. RO 3300. 15 |-0 = 300 -1,7

Creative Homework/Short Project Assume that you arean entrepreneur who runs a bakery that sells glutenfree breads and cakes. You believe that the currenteconomic conditions merit an increase in the price ofyour baked goods. You are concerned. however, thatincreasing the price might not be profitable becauseyou are unsure of the price elasticity of demand for yourproducts. Develop a plan for the measurement of priceelasticity of demand for your products. What findingswould lead you to increase the price? What findingswould cause you to rethink the decision to increaseprices? Develop a presentation for your class outlining(I) the concept of elasticity of demand, (2) why raisingprices without undetstanding the elasticity would bea bad move. (3) your recommendations for measurement. and (4) the potential impact on profits for elasticand inelastic demand

urgent i will 5 upvotes.

10. Problems and Applications Q10 Consider public policy aimed at smoking. Studies indicate that the price elasticity of demand for cigarettes is about 0.2. If a pack of cigarettes currently costs $5 and the government wants to reduce smoking by 10%, it should increase the price by If the government permanently increases the price of cigarettes, the effect on smoking 1 year from now will be from now. Studies also find that teenagers have a higher price elasticity of demand than do adults. Which of the following statements are consistent with this result? Check all that apply. 00 Adults are more likely to be addicted to cigarettes. smaller Teenagers do not have as much income as adults, so they are more price sensitive. larger It is legal for adults to consume alcohol, so many choose to spend their money on that good rather than cigarettes. % than the effect 5 years

2

After a destructive hurricane in Southeast Texas, gasoline prices around the country increased dramatically. Demand did not decrease much primarily because O there is a long time period under consideration O there are very few substitutes for the product. O there is a small amount of this product. O the cost of the product is a rclatively small percentage of onc's income

Problem 03-04 (algo) Suppose the own price elasticity of demand for good X is -3, its income elasticity is -3, its advertising elasticity is 4, and the cross- price elasticity of demand between it and good Yis 2. Determine how much the consumption of this good will change if: Instructions: Enter your responses as percentages. If you are entering a negative number, be sure to use a (-) sign. a. The price of good X decreases by 7 percent. percent b. The price of good Yincreases by 9 percent. percent C. Advertising decreases by 2 percent. percent d. Income increases by 5 percent. percent

If a product has an income elasticity of demand of -2.5 (minus 2.5), and buyers' incomes decrease by 50%, then: O purchases of this product will fall by 50%. O purchases of this product will fall by 2.5%. O purchases of this product will increase by 125%. O purchases of this product will increase by 150%. O purchases of this product will increase by 20%.

Genovia has experienced exceptional growth in recent years. Its GDP per capita (orIncome) has increased from around $30,000 to $50,000 in last 5 years. Over theperiod quantity demanded of personal cars has increased from 450,000 units per yearto 600,000 units. Quantity demanded of public transport, however, has declined from10,000 buses to 7,000 buses. Calculate income elasticity of demand and tell whichproduct is a normal good and which one is inferior.