Mac-book air sales are 1.6 million units at $1499.  Apple raises the price by 10%. sales decrease to 1.28 million units. Calculate the product’s elasticity of demand then classify it as inelastic or elastic..

Plot the price and quantity data given in the demand schedule of exercise 1. Put price on the vertical axis and quantity on the horizontal axis. Indicate the price elasticity value at each quantity demanded. Explain why the elasticity value gets smaller as you move down the demand curve.

Suppose a university raises its tuition from 3,000 to 3,500. As a result, student enrollment falls from 5,000 to 4,500. Calculate the price elasticity of demand. Is demand elastic, unitary elastic, or inelastic?

The Stopdecay Company sells an electric toothbrush for $25. Its sales have averaged 8,000 units per month over the past year. Recently, its closest competitor, Decayfigh ter, reduced the price of its electric toothbrush from $35 to $30. As a result, Stopde cays sales declined by 1,500 units per month. What is the arc cross elasticity of demand between Stopdecays toothbrush and Decayfighters toothbrush? What does this indicate about the relationship between the two products? If Stopdecay knows that the arc price elasticity of demand for its toothbrush is 1.5, what price would Stopdecay have to charge to sell the same number of units as it did before the Decayfighter price cut? Assume that Decayfighter holds the price of its toothbrush constant at $30. What is Stopdecays average monthly total revenue from the sale of electric toothbrushes before and after the price change determined in part (b)? Is the result in part (c) necessarily desirable? What other factors would have to be taken into consideration?

Isabella always spends $50 on red roses each month and simply adjusts the quantity she purchases as the price changes. What can you say about Isabella's elasticity of demand for roses?

Suppose a movie theater raises the price of popcorn 10 percent, but customers do not buy any less popcorn. What does this tell you about the price elasticity of demand? What will happen to total revenue as a result of the price increase?

(Cross-Price Elasticity) Rank the following in order of increasing (from negative to positive) cross-price elasticity of demand with coffee. Explain your reasoning. Bleach _____ Tea _____ Cream _____ Cola _____

The president of Tucker Motors says, Lowering the price wont sell a single additional Tucker car. The president believes that the price elasticity of demand is a. perfectly elastic. b. perfectly inelastic. c. unitary elastic. d. elastic.

If the elasticity of demand for hamburgers equals 21.5 and the quantity demanded equals 40,000, predict what will happen to the quantity demanded of hamburgers when the price increases by 10 percent. If the price falls by 5 percent, what will happen?

Suppose Good Foods supermarket raises the price of its steak and finds that its total revenue from steak sales does not change. This is evidence that price elasticity of demand for steak is a. perfectly elastic. b. perfectly inelastic. c. unitary elastic. d. inelastic. e. elastic.