Micro Economics For Today
Micro Economics For Today
10th Edition
ISBN: 9781337613064
Author: Tucker, Irvin B.
Publisher: Cengage,
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Chapter 5, Problem 3SQ
To determine

The price elasticity of demand.

Option 'a' is correct.

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A: Suppose the initial demand at the price of $10 was 100. When the price rises to $12, the demand drops to 30. Find the price elasticity of the demand. Is the demand elastic or inelastic in this price range? Will the revenue increase or decrease as the result of this price change? Justify your answer. B:. Using calculus, calculate the price elasticity of the following demand functions: D(p)=10-2ln(p) and D(p)=7p -3 . C: Suppose now that the demand is D(p)=12-3p. At what price is the revenue maximized? What is the maximum revenue? What is the price elasticity of demand at this price?
The demand for good X has been estimated by Q xd = 12 − 3Px + 4Py. Suppose that the price of good X (Px) is $2 per unit and the price of good Y (Py) is $1 per unit. (a) Calculate the own price elasticity. Please show your calculations. (b) Calculate the cross price elasticity of demand. Please show your calculations.
Compute the elasticity values. State the degree of elasticity and the nature of the goods.1. An increase in the price of Good Y from $5.00 to $6.00 causes the demand for Good X to decrease from 1000 units to 700 units.2. An increase in income from $3000 to $4000 causes the demand for chicken to increase from 6 to 7 kilos.3. The equation for a demand curve is P = 48 – 3Q. What is the elasticity in moving from a quantity of 5 to a quantity of 6?4. The equation for a supply curve is P = 3Q – 8. What is the elasticity in moving from a price of 4 to a price of 7?
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