EBK INTERMEDIATE MICROECONOMICS AND ITS
12th Edition
ISBN: 9781305176386
Author: Snyder
Publisher: YUZU
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Chapter 11.2, Problem 2.1MQ
To determine
To discuss: If the price and quantity can move in opposite directions when there is a rise in
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PRICE (Dollars per room)
500
450
400
350
300
250
200
150
100
50
0
Demand
0 50 100 150 200 250 300 350 400 450 500
QUANTITY (Hotel rooms)
Graph Input Tool
Market for Triple Sevens's Hotel Rooms
Price
(Dollars per room)
Quantity
Demanded
(Hotel rooms per
night)
Demand Factors
Average Income
(Thousands of dollars)
Airfare from LAX to
LAS
(Dollars per roundtrip)
Room Rate at
Exhilaration
(Dollars per night)
350
150
50
250
200
For each of the following scenarios, begin by assuming that all demand factors are set to their original values and Triple Sevens is charging $350 per
room per night.
If average household income increases by 20%, from $50,000 to $60,000 per year, the quantity of rooms demanded at the Triple Sevens
rooms per night. Therefore, the income elasticity of demand is
from
rooms per night to
, meaning that
hotel rooms at the Triple Sevens are
If the price of an airline ticket from LAX to LAS were to increase by 20%, from $250 to $300 roundtrip, while all other demand factors…
Suppose a movie theater determines it can charge different prices to patrons who go to weekday matinees and people who attend
evening and weekend shows. The movie theater's goal is to increase total revenue.
See Hint
The price elasticity of demand for weekend and evening patrons is -0.50, and the price elasticity of demand for matinee moviegoers is
-2.80.
Based on the price elasticity of demand for each group of people, how should the movie theater adjust its prices?
Choose one:
O A. Raise the price for matinee moviegoers, and keep the price the same for weekend and evening patrons.
O B. Lower the price for matinee moviegoers, and raise the price for weekend and evening patrons.
O C. Lower the price for matinee moviegoers, and keep the price the same for weekend and evening patrons.
O D. Raise the price for matinee moviegoers, and lower the price for weekend and evening patrons.
Assuming zero disposal costs, why is the correct profit maximising price to charge for the unsold trees on Christmas Eve the one at which the elasticity of demand is equal to -1? Illustrate using a diagram. Would the price be lower still if there were some disposal costs that the seller would face to dispose of the unsold trees?
Chapter 11 Solutions
EBK INTERMEDIATE MICROECONOMICS AND ITS
Ch. 11.2 - Prob. 1TTACh. 11.2 - Prob. 2TTACh. 11.2 - Prob. 1MQCh. 11.2 - Prob. 2MQCh. 11.2 - Prob. 1.1MQCh. 11.2 - Prob. 2.1MQCh. 11.3 - Prob. 1MQCh. 11.3 - Prob. 1TTACh. 11.3 - Prob. 2TTACh. 11.4 - Prob. 1TTA
Ch. 11.4 - Prob. 2TTACh. 11.4 - Prob. 1MQCh. 11.4 - Prob. 2MQCh. 11.4 - Prob. 1.1TTACh. 11.4 - Prob. 2.1TTACh. 11.4 - Prob. 1.2TTACh. 11.4 - Prob. 2.2TTACh. 11.5 - Prob. 1MQCh. 11.5 - Prob. 1TTACh. 11.5 - Prob. 2TTACh. 11 - Prob. 1RQCh. 11 - Prob. 2RQCh. 11 - Prob. 3RQCh. 11 - Prob. 4RQCh. 11 - Prob. 5RQCh. 11 - Prob. 6RQCh. 11 - Prob. 7RQCh. 11 - Prob. 8RQCh. 11 - Prob. 9RQCh. 11 - Prob. 10RQCh. 11 - Prob. 11.1PCh. 11 - Prob. 11.2PCh. 11 - Prob. 11.3PCh. 11 - Prob. 11.4PCh. 11 - Prob. 11.5PCh. 11 - Prob. 11.6PCh. 11 - Prob. 11.7PCh. 11 - Prob. 11.8PCh. 11 - Prob. 11.9PCh. 11 - Prob. 11.10P
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