ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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The demand curve for a product is given by QXd = 1,200 - 3PX - 0.1PZ where Pz = $300.
a. What is the own
Instruction: Enter your response rounded to two decimal places.
Own price elasticity:
Demand is: inelastic or elastic ?
If the firm prices below $140, revenue will: decrease or not change or increase ?
b. What is the own price elasticity of demand when Px = $240? Is demand elastic or inelastic at this price? What would happen to the firm’s revenue if it decided to charge a price above $240?
Instruction: Enter your response rounded to one decimal place.
Own price elasticity:
Demand is: elastic or inelastic ?
If the firm prices above $240, revenue will: not change or decrease or increase ?
c. What is the cross-price elasticity of demand between good X and good Z when Px = $140? Are goods X and Z substitutes or complements?
Instruction: Enter your response rounded to two decimal places.
Cross-price elasticity:
Goods X and Z are: complements or substitutes ?
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