Micro Economics For Today
10th Edition
ISBN: 9781337613064
Author: Tucker, Irvin B.
Publisher: Cengage,
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Chapter 5, Problem 11SQP
To determine
To compare the income
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The consumer demand equation for tissues is given by q = (110 - p)2, where p is the price per case of tissues and q is the
demand in weekly sales.
(a) Determine the price elasticity of demand E when the price is set at $26. (Round your answer to three decimal places.)
E-0.619
Interpret your answer.
The demand is going down by 0.619
% per 1% increase in price at that price level.
(b) At what price should tissues be sold to maximize the revenue? (Round your answer to the nearest cent.)
$37
x
(c) Approximately how many cases of tissues would be demanded at that price? (Round your answer to the nearest whole
number.)
5329
X cases per week
The consumer demand equation for tissues is given by
q = 11,664 −216 p +p2,
where p is the price per case of tissues and q is the demand in weekly sales.
Determine the price elasticity of demand E when the price is set at $24. (Round your answer to three decimal places.)E =
consider public policy aimed at smoking. Studies indicate that the price elasticity of demand for cigarettes is about 0.4. If a pack of cigarettes currently cost $5 and the government wants to reduce smoking by 20%, it should increase the price by what %? If the government permanently increases the price of cigarettes, the effect on smoking 1 year from now will be blank than the effect 3 months from now. Studies also find that teenagers have a higher price
Chapter 5 Solutions
Micro Economics For Today
Ch. 5.3 - According to the previous discussion, what factors...Ch. 5 - If the price of a good or service increases and...Ch. 5 - Prob. 2SQPCh. 5 - Prob. 3SQPCh. 5 - Prob. 4SQPCh. 5 - Suppose a university raises its tuition from 3,000...Ch. 5 - Prob. 6SQPCh. 5 - Suppose a movie theater raises the price of...Ch. 5 - Charles loves Mello Yello and will spend 10 per...Ch. 5 - Prob. 9SQP
Ch. 5 - Prob. 10SQPCh. 5 - Prob. 11SQPCh. 5 - Prob. 12SQPCh. 5 - Prob. 13SQPCh. 5 - Consider the following supply schedule: What is...Ch. 5 - Prob. 15SQPCh. 5 - Prob. 16SQPCh. 5 - A perfectly elastic demand curve has an elasticity...Ch. 5 - Prob. 2SQCh. 5 - Prob. 3SQCh. 5 - Prob. 4SQCh. 5 - Price elasticity of demand tends to be larger in...Ch. 5 - If a decrease in the price of movie tickets...Ch. 5 - Prob. 7SQCh. 5 - The president of Tucker Motors says, Lowering the...Ch. 5 - Prob. 9SQCh. 5 - Along a segment of the demand curve where the...Ch. 5 - Prob. 11SQCh. 5 - Prob. 12SQCh. 5 - Prob. 13SQCh. 5 - Prob. 14SQCh. 5 - Prob. 15SQCh. 5 - Prob. 16SQCh. 5 - Suppose Sally buys exactly five bars of English...Ch. 5 - Prob. 18SQCh. 5 - Prob. 19SQCh. 5 - Prob. 20SQCh. 5 - If bus travel is an inferior good, its income...Ch. 5 - Prob. 22SQCh. 5 - If automobiles and gasoline are complements, then...Ch. 5 - Suppose that when price is 10, quantity supplied...Ch. 5 - Prob. 25SQ
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- Suppose that you observe that when the price of a particular vaccine falls by 4%, the quantity purchased____ by 2%. This implies that this vaccine is price in demand and that the price elasticity of demand is equal to ______ falls; elastic; 2 falls; inelastic; 0.5 rises; elastic; 2 rises; inelastic; 0.5arrow_forwardSuppose the income elasticity of demand for furniture is 3 and the income elasticity of demand for physician services is 0.3. Compare the impact on furniture and physician services of a recession that reduces consumer income by 10%.arrow_forwardThe elasticity of demand for physician visits was determined to be -0.2. The president of the local insurance company wants to add a copayment of $0.50 onto each physician visit. Currently, there is no copay. The number of insured people is 3,000,000 and currently the population uses 2.4 visits per capita. How many visits will they use after the introduction of the copayment?arrow_forward
- When is use of the arc elasticity concept valid as compared with the use of the point elasticity concept?arrow_forwardConsider public policy aimed at smoking. Studies indicate that the price elasticity of demand for cigarettes is about 0.5. If a pack of cigarettes currently costs $5 and the government wants to reduce smoking by 30%, it should increase the price by . If the government permanently increases the price of cigarettes, the effect on smoking 1 year from now will be than the effect 5 years from now. Studies also find that teenagers have a higher price elasticity of demand than do adults. Which of the following statements are consistent with this result? Check all that apply. It is legal for adults to consume alcohol, so many choose to spend their money on that good rather than cigarettes. Adults are more likely to be addicted to cigarettes. Teenagers do not have as much income as adults, so they are more price sensitive.arrow_forwardBonus Question. Suppose that a consumer makes V0 physician visits each year at a price of P0. If the price elasticity is -0.4, what will happen to the number of visits if the price increases by 15 percent? What will happen to total physician expenditures? Explain your answers. Hint: take into account that physician expenditures is the same as a physician’s practice revenue. Also, consider the relationship of elasticity and revenues.arrow_forward
- In the presence of insurance coverage, over the counter purchases of drugs like acetaminophen, ibuprofen and naproxen sodium will have a higher elasticity of demand than physician prescribed drugs. True Falsearrow_forwardSuppose that a consumer's annual demand for office visits is described by the equation Q = 8 -0.1p. If office visits cost $30, and the consumer has no health insurance (i.e., the consumer pays full price), how many office visits will she make? What is the price elasticity of demand for office visits at this point? Suppose a health insurance plan is instituted that pays for one-third of each office visit. How would this affect the quantity and the demand elasticity at the new equilibrium?arrow_forwardSuppose you're trying to compare the year-to-year performance of one of your regional salespeople over a period during which income grew by 3%. If demand for your products has an income elasticity of 2, how would you measure the salesperson's performance?arrow_forward
- Exercise : Following an increase in it's price, from 10$ to 12$, the demand for a good falls from 10500 to8100 units.What elasticity of demand would you estimate from these data? Calculate its value, first by using the general formula (for discrete changes), then by assuming a constantconstant elasticity of demand (log formula).Calculate the demand for p=9 (note q9 the quantity for p=9), using the general formula then in log of the elasticity calculated in Now, Knowing the value of the direct price elasticity of demand calculated previously, assuming constant costs andcosts and rivals not responding to your price cut, would you have recommended the price cut from 10 to 9?price cut from 10 to 9 ?arrow_forwardIf the price elasticity of demand for used cars priced between $4,000 and $6,000 is -0.75 (using the mid-point method), what will be the percent change in quantity demanded when the price of a used car falls from $6,000 to $4,000? Instructions: Round your answer to the nearest whole number. ___percent. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.arrow_forwardConsider the measurement of prices in the medical sector, where there is rapid innovation. Consider the case of a medical check-up for pregnant women. Assume that this service is privately provided. Suppose that a new ultrasound method is introduced. In the first year that this new method is available, half of doctors offer the new method and half offer the old method. Pregnant women frequent both doctors. A checkup using the new method costs 10% more than a check-up using the old one. 1. In percentage terms, how much of a quality increase does the new method represent compared to the old method? Now suppose that in addition, in the first year the new method is offered, the price of check- ups with the new method is 15% higher than the price of check-ups in the previous year (when everyone used the old method). 2. How much of the higher price of checkups using the new method reflects a true price increase and how much represents a quality increase? How much higher is the quality-…arrow_forward
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