EBK INTERMEDIATE MICROECONOMICS AND ITS
12th Edition
ISBN: 9781305176386
Author: Snyder
Publisher: YUZU
expand_more
expand_more
format_list_bulleted
Videos
Question
Chapter 3, Problem 3.10P
a.
To determine
To observe the value of P, where Q=0, using the given
b.
To determine
To prove that the distance, Y, results from −Q*/b.
c.
To determine
To prove that the given equation stands true assuming the fact that the linear equation is true.
d.
To determine
To prove the given equation.
e.
To determine
To describe how the price of
f.
To determine
To determine if it is possible to use the results of part C and approximate the price elasticity of demand at any given point on a nonlinear demand curve.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
The inverse demand for good X is given by Px=25-0.005Qx+0.15Py+0.1I where Px is the price of X, Py is the price of Y, I is income, and Qx is the quantity demanded of good X.
The inverse demand is just price as a function of quantity instead of quantity as a function of price. To get the demand function, just solve the equation for Qx. You should do this before answering the following.
Goods X and Y are . . . .. . . .. . . .. . . . .. . . .
X is a . . .. . . . .. . . good.
Suppose that you are a staff economist with an economic consulting firm. The operator of a local harbour has commissioned your firm to do a market analysis of the demand for berths (parking spaces) for boats. Your firm finds that the price elasticity of demand for berths is –0.8.
If the price of a berth in the area decreases by 6%, how will the quantity of berths that people demand change? The number of berths demanded will:
Increase by 0.8%
Decrease by 7.5%
Increase by 6%
Increase by 4.8%
Suppose that at a price of $1 per subscription,
100,000 subscriptions are demanded for The
Post-Standard (the major daily newspaper
servicing the greater Syracuse, New York).
But, if the price is raised to $1.1, demand is
70,000 subscriptions. As the head of the
analytic team, will you suggest to the editor of
Post- Standard that an increase in
subscription price will not significantly
influence consumer demand?
E = |-3|>10Elastic demand (an increase in
subscription price will significantly influence
consumer demand)
Chapter 3 Solutions
EBK INTERMEDIATE MICROECONOMICS AND ITS
Ch. 3.2 - Prob. 1MQCh. 3.2 - Prob. 2MQCh. 3.3 - Prob. 1TTACh. 3.3 - Prob. 2TTACh. 3.3 - Prob. 2MQCh. 3.4 - Prob. 1TTACh. 3.4 - Prob. 2TTACh. 3.5 - Prob. 1MQCh. 3.5 - Prob. 2MQCh. 3.7 - Prob. 1MQ
Ch. 3.7 - Prob. 2MQCh. 3.9 - Prob. 1MQCh. 3.9 - Prob. 2MQCh. 3.10 - Prob. 1TTACh. 3.10 - Prob. 2TTACh. 3.11 - Prob. 1MQCh. 3.11 - Prob. 2MQCh. 3.12 - Prob. 1TTACh. 3.12 - Prob. 2TTACh. 3.12 - Prob. 1MQCh. 3.12 - Prob. 2MQCh. 3.12 - Prob. 1.1TTACh. 3.12 - Prob. 2.1TTACh. 3.14 - Prob. 1MQCh. 3.14 - Prob. 2MQCh. 3.14 - Prob. 1TTACh. 3.14 - Prob. 2TTACh. 3.15 - Prob. 1MQCh. 3.15 - Prob. 2MQCh. 3 - Prob. 1RQCh. 3 - Prob. 2RQCh. 3 - Prob. 3RQCh. 3 - Prob. 5RQCh. 3 - Prob. 6RQCh. 3 - Prob. 7RQCh. 3 - Prob. 8RQCh. 3 - Prob. 9RQCh. 3 - Prob. 10RQCh. 3 - Prob. 3.1PCh. 3 - Prob. 3.2PCh. 3 - Prob. 3.3PCh. 3 - Prob. 3.4PCh. 3 - Prob. 3.5PCh. 3 - Prob. 3.6PCh. 3 - Prob. 3.7PCh. 3 - Prob. 3.8PCh. 3 - Prob. 3.9PCh. 3 - Prob. 3.10P
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Similar questions
- Using the following equation for the demand for a good or service, calculate the price elasticity of demand (using the point form), cross-price elasticity with good x and income elasticity. Q=82P+0.10I+Px Q is quantity demanded, P is the product price. P1 is the price of a related good, and I is income. Assume that P= $10, I = 100, and Px = 20.arrow_forwardSuppose a straight-line downward-sloping demand curve shifts rightward. Is the price elasticity of demand higher, lower, or the same between any two prices on the new (higher) demand curve than on the old (lower) demand curve?arrow_forwardSuppose Sally buys exactly five bars of English toffee each week, regardless of whether the toffee bars are regularly priced at 1 or on sale for 0.50. Based on this information, what is Sallys price elasticity of demand for English toffee in this price range? a. 0 b. 1 c. Infinity d. Cannot be determined.arrow_forward
- Using either the arc elasticity formula or calculus, calculate cross price elasticity of demand (Exy) for pork with respect to beef around (i.e., +/- 1%) a price of beef of $6.00, given a market price for pork of $3.00, and given the following information: Where: I= income = 6 pBeef price of beef = 6 Chicken price of chicken = 3 0.507692 0.230769 NOTE: Elasticity calculations are very sensitive to rounding. If you elect to perform multiple individual calculations, use and round to six significant digits (i.e., six decimal places, e.g., 0.000001) in each calculation. 0.184615 0.061538 Qork 130-40pPork +51 +11pBeef +8pChicken Qork 160 + 10pPork-2pLabor-6pRent - 4pCapital -0.123077 O-0.276923 O-0.923077 plabor labor wage rate = 8 pRent price of rent = 6 pCapital price of capital = 2 -arrow_forwardDemand for Magnum Ice Cream is given by an equation as Q = 70 – 10P + 4 Px + 50 I Where, Q = Quantity of Magnum demanded, P = Price of Magnum Ice Cream, Px = Price of Walls Ice Cream, I = Per Capita Incomea. Assume P = Rs 100, Px = Rs 120 and I = Rs 25 (Rs in thousands). Calculate (i) Price Elasticity of Demand(ii) Cross Price Elasticity of Demand(iii) Income Elasticity of Demandarrow_forwardUse the graph for Yolanda's Frozen Yogurt Stand to answer the questions that follow. Use the midpoint formula to calculate the price elasticity of demand for D₁ between point A and point C and the price elasticity of demand for D₂ between point A and point B. Price elasticity of demand for D₁ (Enter your response rounded to two decimal places. Be sure to include the minus sign.) = Price elasticity of demand for D2 (Enter your response rounded to two decimal places. Be sure to include the minus sign.) Which curve is more elastic? Suppose Yolanda is initially selling 200 cones per day at a price of $2.50 per cone. If she changes her price to $1.50 per cone and her demand curve is D₁, what will be the change in her revenue? $ (Enter your response rounded to two decimal places and include a minus sign if necessary.) What will be the change in her revenue if her demand curve is D₂? $ (Enter your response rounded to two decimal places and include a minus sign if necessary.) C Price (dollars…arrow_forward
- Suppose your estimated equation for Soft Drink Demand is Cans = a + B1*Price + B2*Income + B3*Temp + B4*Outdoor = 400 - 150*Price + 3*Income + 1*Temp + 40*Outdoor. Now suppose Price = 2.08, Income = 17, Temp = 69 and the state is an "Outdoor" state. Use the demand function I just provided to find the point Price Elasticity of demand. [Side Note: you are finding the point price elasticity of soft drink demand for Texas.] O A. .68. O B. -1.26. OC.-1.63. O D. -2.64. O E. None of the above. QUESTION 18 Next, estimate the multiplicative or log linear equation (2) InCans = Ina + B1*InPrice + B2*Inlncome + B3*InTemp + B4*Outdoor. You will need to convert Cans, Price, Income and Temp into natural log variables to estimate this equation. Outdoor is still a 0 -1 dummy variable, where an outdoor state is assigned a value of 1.0. Do not try to take the log of the Outdoor dummy variable. What percentage of the variation in demand for cans is explained by this model? O A. 89. O B..74. OC..61. O D.…arrow_forwardDue to a recession that lowered incomes, the 2008 market prices for last-minute rentals of U.S. beachfront properties were lower than usual. Suppose that the inverse demand function for renting a beachfront property in Ocean City, New Jersey, during the first week of August is Derive the equilibrium price, p, and the quantity, Q", in terms of Y. The equilibrium quantity, Q', ist p=1000-Q+= Y where Y is the median annual income of the people involved in this market, Q is quantity, and p is the rental price. The inverse supply function is Q Y 50 p= Q² = 10arrow_forwardYou have the following demand function: QD=300-2 P Where the "300" is actually in three parts, an intercept term, an income term (M), and a "price of related good" term (PR) as we've been doing all semester. So, when the demand function is pulled apart, you have this: QD = 40 - 2 P + 2*M + 4*PR And M = 80 and PR = 25. (If you plug in those two numbers you'll see you get exactly the top equation. Now, one of two things could happen: M could increase to 100, or PR could increase to 35. Do the math to answer this question. And remember, I'm asking (below) about the demand curve. Which of the following is correct? Multiple Choice O O The increase in income (M) would shift this demand curve farther to the right than the increase in PR would. The increase in PR would shift this demand curve farther to the right than the increase in income (M) would The two changes would shift the demand curve exactly the same amount None of the above is correctarrow_forward
- The question has three parts 1. Graph( attached as an image) 2. graph (attached as an image) 3.According to the midpoint method, the price elasticity of demand between points A and B is approximately.............................(0/0.6/1.67/75.02). Suppose the price of bikes is currently $200 per bike, shown as point A on the initial graph. Because the demand between points A and B is......................( elastic/inelastic/unit elastic), a $25-per-bike decrease in price will lead to............................(a decrease/an increase/no change) in total revenue per day. In general, in order for a price increase to cause a decrease in total revenue, demand must be......................( elastic/inelastic/unit elastic).arrow_forwardA movement along the demand curve, represented by points A and B, is shown in the diagram to the right. Point A (30, 70) is the initial point, and point B (40, 60) is the point after the price change. The textbook provides two methods for computing price elasticity of demand. Using the information above, compute the price elasticity of demand using each of these methods. (Enter your responses rounded to two decimal places and include a minus sign if necessary.) Using the initial values as a base, the elasticity of demand is C... Price per unit ($) 1007 90- 80- 70- 60- 50- 8 8 8 40- 30- 20- 10- 70 60 0 Demand A 00 B :30 40 10 20 30 40 50 60 70 Quantity per unit of time 80 D 90 1arrow_forwardUse the graph for Yolanda's Frozen Yogurt Stand to answer the questions that follow. Use the midpoint formula to calculate the price elasticity of demand for D₁ between point A and point C and the price elasticity of demand for D₂ between point A and point B. Price elasticity of demand for D₁ = (Enter your response rounded to two decimal places. Be sure to include the minus sign.) = Price elasticity of demand for D₂ (Enter your response rounded to two decimal places. Be sure to include the minus sign.) Which curve is more elastic? Suppose Yolanda is initially selling 100 cones per day at a price of $2.50 per cone. If she changes her price to $1.00 per cone and her demand curve is D₁, what will be the change in her revenue? $ (Enter your response rounded to two decimal places and include a minus sign if necessary.) What will be the change in her revenue if her demand curve is D₂? $ (Enter your response rounded to two decimal places and include a minus sign if necessary.) C Price…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
How To Understand Elasticity (Economics); Author: Market Power;https://www.youtube.com/watch?v=1XXhpHJTglg;License: Standard Youtube License