ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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1. Using the midpoint method, compute the price elasticity between points X and Y.
2. Use the midpoint method and compute the price elasticity between points X and Y.
select from:
Demand between X and Y is elastic.
Demand between X and Y is inelastic.
Demand between X and Y is unit elastic.
3. Using the midpoint method, compute the price elasticity between points Y and Z.
4. Use the midpoint method and compute the price elasticity between points Y and Z.
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- What is the cross price elasticity?arrow_forward4-6 Suppose that the price of croissants rises from $2 to $3 per unit. Use the mid-point approach to get the elasticity. The quantity of orange juice purchased falls from 10 million bottles to 5 million bottles. What is the cross-price elasticity of demand between croissants and orange juice? Are they complements or substitutes? The quantity of jelly purchased increases from 10 million jars to 20 million jars. What is What is the cross-price elasticity of demand between croissants and orange juice? Are they complements or substitutes?arrow_forwardUsing the midpoint method, the price elasticity of demand for a good is computed to be approximately 0.55. Which of the following events is consistent with a 20 percent decrease in the quantity of the good demanded? a. An increase of 11.0 percent in the price of the good b. an increase of 36.36 percent in the price of the good c. An increase in the price of the good from $11.00 to $20.00 d. an Increase in the price of the good from $20 to $31.00arrow_forward
- Answer the following questions in your own words. Start a new thread while replying. 1. What are the determinants of price elasticity of demand? Explain the determinants. 2. What is the difference between inelastic demand and elastic demand? Provide an example of each from real life. 3. Refer to the graph below: Price 22 20 + 18 +- 16 + 14 B 12 10 + 4 Demand +++ 100 200 300 400 500 600 700 800 900 Buaxtity From the graph above calculate: a. Price elasticity of demand from point A to point B (use the mid-point method). Is it an elastic situation or an inelastic situation? b. Price elasticity of demand from point B to point C (use the mid-point method). Is it an elastic situation or an inelastic situation?arrow_forwardThe following table below shows the information on price, quantity of goods and income level. PRICE OF GOOD A QUANTITY GOOD A GOOD B GOOD C 20 150 80 40 30 100 50 70 Based on the information above, a) Calculate the price elasticity of demand for good A when the price increases from RM 20 to RM 30. b) Calculate the cross-price elasticity of demand for good A and Good B when price increases from RM 20 to RM 30. State the relationship between good A and Good B and give an example of good that has the same relationship with A and good B. c) Calculate the cross-price elasticity of demand for good A and good C when price increases from RM 20 to RM 30. State the relationship between good A and good C and provide an example of good that has the same relationship with A and good C.arrow_forwardSuppose that your demand schedule for DVDs is as follows: Price Quantity Demanded (income - $10,000) $8 40 DVDs 10 32 12 24 14 16 16 B Quantity Demanded I (income-$12,000) 50 DVDs 45 30 20 12 a. Use the midpoint method to calculate your price elasticity of demand as the price of DVDs increases from $12 to $16 if (i) your income is $10,000 and (ii) your income is $12,000. b. Calculate your income elasticity of demand as your income increases from $10,000 to $12,000 if (i) the price is $10 and (ii) the price is $14. c. Is the DVDs normal good or inferior good?arrow_forward
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