EBK INTERMEDIATE MICROECONOMICS AND ITS
12th Edition
ISBN: 9781305176386
Author: Snyder
Publisher: YUZU
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Chapter 8.4, Problem 1MQ
To determine
To find the reason for veretical distance between the demand and marginal revenue curves at a given level of output that depend on price
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The elasticity of Supply is an important concept in Microeconomics as it relates to a business's ability to adjust its production and its production facility in response to market developments. Think of some examples of products and businesses that would have various degrees of Elasticity of Supply and share them here.
For example, what would be the Elasticity of Supply for an original piece of art? What does this imply for the adjustment in this market to a change in Demand?
How would you describe the Elasticity of Supply for a product such as peaches, plums, and other tree fruit? Consider first a brief period, such as weeks, and next a much longer period such as five years. How does the time horizon influence market adjustment when there is a change in Demand?
Over the last three years, Christmas tree prices have increased from an average of $35 per tree to over $75 per tree. How would a Christmas tree farm and the overall industry respond to the price change under the following circumstances? Be sure to explain how your answer depends on the elasticity of supply.
The price increase is a result of fewer Christmas tree farms harvesting trees in response to consumers purchasing more artificial trees.
The effect of the price increase on the Christmas tree industry will be as follows:
*In the long run, the industry supply curve shifts to the left.
*In the long run, as tree farms sell fewer trees, they make losses and exit the industry.
*In the short run, the increase in price leads to profits for tree farms.
*In the short run, the tree farms exit the Christmas tree business and grow other lucrative plants.
There are three sets of price and quantity below for a firm.P1 = $40 Q1 = 20P2 = $30 Q2 = 40
P1 = 30 Q1 = 40P2= 25 Q2 = 50
P1 = 25 Q1 = 50P2 = 20 Q2 = 60
Given the information above on the four sets of price and quantity
1. Using the price elasticity of demand (PED) formula (using the average formula),calculate the PED for each set of price and quantity demanded change, and determine inabsolute value the range of elasticity?
2. Using the information of above, calculate the total revenue (TR) for each and given theinformation from parts a, b and c, predict the price this firm will charge?
Chapter 8 Solutions
EBK INTERMEDIATE MICROECONOMICS AND ITS
Ch. 8.3 - Prob. 1MQCh. 8.3 - Prob. 2MQCh. 8.3 - Prob. 1.1MQCh. 8.3 - Prob. 2.1MQCh. 8.4 - Prob. 1TTACh. 8.4 - Prob. 2TTACh. 8.4 - Prob. 1MQCh. 8.4 - Prob. 2MQCh. 8.5 - Prob. 1TTACh. 8.5 - Prob. 2TTA
Ch. 8.5 - Prob. 1.1TTACh. 8.5 - Prob. 2.1TTACh. 8.5 - Prob. 1MQCh. 8.5 - Prob. 2MQCh. 8 - Prob. 1RQCh. 8 - Prob. 2RQCh. 8 - Prob. 3RQCh. 8 - Prob. 4RQCh. 8 - Prob. 5RQCh. 8 - Prob. 6RQCh. 8 - Prob. 7RQCh. 8 - Prob. 8RQCh. 8 - Prob. 9RQCh. 8 - Prob. 10RQCh. 8 - Prob. 8.1PCh. 8 - Prob. 8.2PCh. 8 - Prob. 8.3PCh. 8 - Prob. 8.4PCh. 8 - Prob. 8.5PCh. 8 - Prob. 8.6PCh. 8 - Prob. 8.7PCh. 8 - Prob. 8.8PCh. 8 - Prob. 8.9PCh. 8 - Prob. 8.10P
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How To Understand Elasticity (Economics); Author: Market Power;https://www.youtube.com/watch?v=1XXhpHJTglg;License: Standard Youtube License