(10 points) Spring Assignment Suppose the price of gasoline rises from $1.89 to 2.17 per gallon, and in response the quantity demanded decreases from 20,000 to 18,000 gallons.
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- (a) Define Price Elasticity of Demand. What are the 3 Types of Price Elasticity of Demand?(b) Calculate the Price Elasticity of Demand from the graph.(c) Depending on the elasticity, what kind of good does the given graph show? Explain(a) Define the price elasticity of demand and the income elasticity of demand. (b) Elaborate FOUR (4) determinants of the price elasticity of demand. "Tea and coffee are substitute goods, while cars and petrol are complementary goods." Discuss this statement based on the concept of cross elasticity of demand. (c)(A) Define the price elasticity of demand (B) Calculate the price elasticity of demand given that price rise by 10% and demand falls by 4% Please be quick
- Suppose John, the owner-manager of a local hotel, projects the following demand for his rooms: Price ($) Quantity Purchased (per Night) Total Revenue 90 100 110 90 130 70 (a)Calculate the price elasticity of demand between $90 and $110. (Use the midpoint formula) (b)Is the price elasticity of demand between $90 and $110 elastic, unit elastic, or inelastic? (c)Will John’s total revenue rise if he increases the price from $90 to $110?…11.) In the market for cars, the price elasticity of supply is +1.5, and the price elasticity ofdemand is -0.8. The equilibrium price is $ 30 thousand, and quantity is 120 million.(a) Assuming supply and demand are linear, reconstruct and draw the supply and demandcurves. Label the intercepts.(b) To reduce traffic, the government imposes a $400 tax on cars. What are PB and PS after thetax? What is the new equilibrium quantity? Illustrate them on the same graph.(c) How big is the change in consumer surplus, producer surplus, government revenue, anddeadweight loss?Price (dollars per bushel) Quantity Demanded (bushels) 10 0. B. 8. 4. 6. 8. 4. 12 2. 16 (1) The table above gives the demand schedule for peas. As you move from point A to point B, what is the price elasticity of demand? (I) The table above gives the demand schedule for peas. As you moOve from point C to point D, what is the price elasticity of demand? () The table above gives the demand schedule for peas. As you move from point C to point D, what is the changes of the total revenue?
- 2. (a) Suppose that business travelers and vacationers have the following demand for airline tickets. Quantity Demanded (vacationers) 1000 tickets Price Quantity Demanded (business travelers) 2100 tickets $150 200 250 2000 800 1900 1800 600 300 400 As the price of tickets rises from $200 to $250, what is the price elasticity of demand for (i) business travelers and (ii) vacationers? (Use the midpoint method in your calculations & interpret the results) Why might vacationers have a different elasticity from business travelers? (b) “A good harvest will generally lower the income of farmers". Ilustrate this proposition using a supply and demand diagram. GOOD LUCK2. (a) Suppose that business travelers and vacationers have the following demand for airline tickets. Quantity Demanded Quantity Demanded (vacationers) 1000 tickets Price (business travelers) 2100 tickets $150 200 2000 800 250 1900 600 300 1800 400 As the price of tickets rises from $200 to $250, what is the price elasticity of demand for (i) business travelers and (ii) vacationers? (Use the midpoint method in your calculations & interpret the results) Why might vacationers have a different elasticity from business travelers? (b) "A good harvest will generally lower the income of farmers". Illustrate this proposition using a supply and demand diagram.Microeconomics Assignment 5 Elasticity and its Application [10 points] Johnson & Johnson recently reduced the price of "Generic A" from $100 to $60 in New Jersey area market and enjoyed a resulting increase in sales from 600 to 1800 units per day. Sales of "Generic B" also increased from 300 to 1500 units per day. 1 Calculate the arc-price elasticity of demand for Generic A. You also need to interpret the elasticity. 2 Calculate the arc-cross-price elasticity of demand for Generic B. You also need to interpret the elasticity. 3 Is Generic B a "complement" or a "substitute"?