Microeconomics
21st Edition
ISBN: 9781259915727
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
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Chapter 6, Problem 3RQ
Calculate total-revenue data from the
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Pop's Corn Popcorn shop normally sells 100 bags a day when the price is $6 per bag. On half-price
Wednesday, the price is $3 and Pop's sells 150 bags. What is the price elasticity of demand?
O 16.67
O 1.667
O 0.6
O 0.5
O 2
If the price of Moonlight massage oil decreases from $3 to $2.50 and, as a result, total revenue increases from $6,000 to $7,500, what is the elasticity of demand.
O 22.
O 1.22.
O 0.55.
O 1.67.
O 0.22.
Refer to Figure 5.5. Using the midpoint method, if the price of a gardenburger is increased
from $6 to $8, the price elasticity of demand equals:
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2 3 4 5
Number of gardenburge rs
Figure 5.5
O 0.024.
O 1.75.
O 2.0
Price
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Chapter 6 Solutions
Microeconomics
Ch. 6 - Explain why the choice between 1, 2, 3, 4, 5, 6,...Ch. 6 - Prob. 2DQCh. 6 - The income elasticities of demand for movies,...Ch. 6 - Research has found that an increase in the price...Ch. 6 - Prob. 5DQCh. 6 - Suppose that the total revenue received by a...Ch. 6 - Suppose that the total revenue received by a...Ch. 6 - Calculate total-revenue data from the demand...Ch. 6 - Prob. 4RQCh. 6 - 5. In 2006, Willem de Kooning’s abstract painting...
Ch. 6 - Suppose the cross elasticity of demand for...Ch. 6 - Look at the demand curve in Figure 6.2a. Use the...Ch. 6 - Prob. 2PCh. 6 - Graph the accompanying demand data, and then use...Ch. 6 - Danny Dimes Donahue is a neighborhoods 9-year-old...Ch. 6 - What is the formula for measuring the price...Ch. 6 - ADVANCED ANALYSIS Currently, at a price of 1 each,...Ch. 6 - Prob. 7P
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- If an increase in price from $1 to $2 causes a decrease in quantity demanded from 120 to 100, calculate the price elasticity of demand by using the midpoint method. O 1.2 O 1.3 O 0.27 O 0.5arrow_forwardFigure 5-6 O 0.40 09.11 O 0.26 2 CO 2,48 9 643 Supply Refer to Figure 5-6. Using the midpoint method, what is the price elasticity of supply between points E and F? 100 200 325 400 450 500arrow_forwardRafael's Barber Shop knows that a 5 percent decrease in the price of its haircuts results in a 15 percent increase in the number of haircuts purchased. What is the elasticity of demand facing Rafael's Barber Shop? O 0.05 0.10 0.15 O 3.0arrow_forward
- Price Supply $ 300.00 $ 275.00 $ 250.00 $ 225.00 $ 200.00 $ 175.00 $ 150.00 $ 125.00 $ 100.00 $ 75.00 500 450 400 350 300 250 200 150 100 50 $ 50.00 From the supply curve, use the midpoint method to calculate the elasticity of supply when the price falls from $225 to $200. O 1 O 0.89 O 0.5 O 1.31arrow_forwardSuppose after graduating from college you get a job working at a bank earning RM30,000 per year. After two years of working at the bank earning the same salary, you have an opportunity to enroll in a one-year graduate program that would require you to quit your job at the bank. Which of the following should not be included in a calculation of your opportunity cost? А. The RM45,000 salary that you will be able to earn after having completed your graduate program В. The RM30,000 salary that you could have earned if you retained your job at the bank C. The value of insurance coverage and other employee benefits you would have received if you retained your job at the bank D. The cost of tuition and books to attend the graduate programarrow_forward17. Problems and Applications Q3 Suppose the price elasticity of demand for heating oil is 0.1 in the short run and 0.9 in the long run. If the price of heating oil rises from $1.80 to $2.20 per gallon, the quantity of heating oil demanded will % in the long run. The change is in the short run because people can respond oil. by % in the short run and by easily to the change in the price of heatingarrow_forward
- An end-of-aisle price promotion changes the price elasticity of a good from -4 to -5. Suppose the normal price is $48, which equates marginal revenue with marginal cost at the initial elasticity of -4. What should the promotional price be when the elasticity changes to -5? (Hint: In other words, what price will equate marginal revenue and marginal cost?) O $27.00 O $45.00 O $36.00 O $31.50arrow_forwardA Moving to another question will save this response. Question 10 Copy of A shop sells 100 mugs per week at $2 each. When it increases the price to $2.5, the number of mugs sold falls to 50 per week. What is the price elasticity of demand? O 0.5 O 1 O 1.5 O 2arrow_forwardOn the following graph, use the green point (triangle symbol) to plot the annual total revenue when the market price is $30, $45, $60, $75, $90, $105, and $120 per bike. 1280 1200 Total Revenue 1120 - 1040 980 880 800 720 640 560 o15 30 45 60 75 90 105 120 135 150 165 180 PRICE (Dollars per bike) According to the midpoint method, the price elasticity of demand between points A and B is approximately ▼ Suppose the price of bikes is currently $30 per bike, shown as point B on the initial graph. Because the demand between points A and B is a $15-per-bike increase in price will lead to in total revenue per day. In general, in order for a price decrease to cause a decrease in total revenue, demand must be TOTAL REVENUE (Dollars)arrow_forward
- 5) Calculate the arc price elasticity of demand for wheat in the two situations below: Farmer Brown's Wheat Old price; $3.40/bu Old quantity; 28,000 bu The Wheat Market Old price; $3.40/bu Old quantity; 2.5 billion bu New price; $3.20/bu New price; $3.20/bu New quantity; 2.525 billion bu New quantity; 35,000 bu Can you account for the difference in elasticities?arrow_forwardAssume that a decrease of 10 percent in the price of cars results in an increase of 30 percent in quantity demanded, then the price elasticity of demand is 3 O 0.5 O 1 O 0.333arrow_forwardFor product X, the price elasticity of demand has an absolute value of 3.5. This means that quantity demanded will increase by O 1 unit for each $3.50 decrease in price, ceteris paribus. O 1 percent for each 3.5 percent decrease in price, ceteris paribus. O 3.5 units for each $1 decrease in price, ceteris paribus. O 3.5 percent for each 1 percent decrease in price, ceteris paribus.arrow_forward
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