Question

You are analyzing the market for Good X. You know the following: PEDx = -1.3 IEDx...

You are analyzing the market for Good X. You know the following:

PEDx = -1.3

IEDx = 2.4

CPE(x,y) = 2

PESx = 1.4

a. If the price of Good Y increases, what do you expect to happen in the market for Good X? Describe any changes that may happen in a supply/demand graph and be sure to include how equilibrium price/quantity changes.

b. Does knowing the price elasticity of supply help you determine how much the supply curve will shift?

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Consider a perfectly competitive market in good x consisting of 250 consumers with a utility function:...
Consider a perfectly competitive market in good x consisting of 250 consumers with a utility function: Denote Px to be the price for good x and suppose Py = 1. Each consumer has income equal u(x, y) = xy to 10. There are 100 firms producing good x according to the cost function c(x) = x^2 + 1. (a) Derive the demand curve for good x for a consumer in the market. (b) Derive the market demand curve for good...
WTH Inc. exhibits the following production relationship between costs and quantity of Good X: Total Quantity...
WTH Inc. exhibits the following production relationship between costs and quantity of Good X: Total Quantity = 1, Marginal Cost = $200; Total Quantity = 2, Marginal Cost = $ 40; Total Quantity = 3, Marginal Cost = $ 30; Total Quantity = 4, Marginal Cost = $130; Total Quantity = 5, Marginal Cost = $175; Construct a Table of all relevant costs and construct the Graph of WTH's Supply Curve for Good X. Point out (and give explanation of)...
Consider the market for good x (good x is an inferior good), now let’s assume that...
Consider the market for good x (good x is an inferior good), now let’s assume that household income has risen in the overall economy while at the same time the price of good y has increased. Good x and y are substitutes in production. What will be the overall effect on equilibrium price and quantity? Hint: do not use a graph.
if downward revision of inflation is expected what do we know about the bond market? if...
if downward revision of inflation is expected what do we know about the bond market? if inflation decreases interest rates decrease if interest decreases price of bond increases bond demand increases mean price of bond increases so shift demand curve to the right what do we know about supply? also if supply moves more than demand quantity decreases if demand moves more than supply quantity increases. Please tell me if my assumptions are correct and what else I should know...
Question 1: Consider a perfectly competitive market in good x consisting of 250 consumers with utility...
Question 1: Consider a perfectly competitive market in good x consisting of 250 consumers with utility function: u(x,y) = xy Denote Px to be the price for good x and suppose Py=1. Each consumer has income equal to 10. There are 100 forms producing good x according to the cost function c(x)=x^2 + 1. a) Derive the demand curve for good x for a consumer in the market b) Derive the market demand curve for good x C) Derive the...
1. Consider the following demand and supply functions for a good or service: Qd = 400...
1. Consider the following demand and supply functions for a good or service: Qd = 400 - 5P and Qs= 3P. a) Graph the supply and demand functions in the typical manner with price per unit (P) on the Y-axis and quantity on the X-axis. Make sure to clearly mark X-intercept and Y-intercept on the graph. b) What is the slope of each line? Show your calculations. c) What is the equilibrium price and quantity? Show your calculations. Show the...
Suppose the demand for good X has estimated to be: lnQxd = 10 - 4lnPx –...
Suppose the demand for good X has estimated to be: lnQxd = 10 - 4lnPx – 2lnPy – 4 lnM. a. How can you tell that demand is downward sloping? b. What is the cross-price elasticity of demand between good X and Y? c. Are good X and Y substitutes or complements? d. Is good X a normal or an inferior good? e. If the price of good X increased by 2 percent, what would happen to the quantity demanded...
For all parts of this question you are analyzing the market for Comcast Cable Service in...
For all parts of this question you are analyzing the market for Comcast Cable Service in your city. Match the descriptions below with whether they would increase or decrease supply or demand. Increase in Supply? Decrease in Quantity Demanded? Decrease in Quantity Supplied? Increase in Demand? Decrease in Supply? Increase in Quantity Supplied? Increase in Quantity Demanded? Decrease in Demand? 1. The price of Comcast cable service decreases. 2. The minimum wage increases; Comcast must pay its employees a higher...
Which of the following would result in a leftward shift in the supply curve for good...
Which of the following would result in a leftward shift in the supply curve for good X can be         attributed to        a. an increase in the price of an input used in the production of the good X.        b. an increase the price of a substitute good in production.        c. an increase in the price of good X.        d. an increase in the price of a complementary good in production.        e. more than one of these choices Which of the...
Suppose the relationship between Demand for good x (Qx) can be described by the following linear...
Suppose the relationship between Demand for good x (Qx) can be described by the following linear relationship (Py: price of good y, I = income): Qx= 120 – 6Px + 5Py + 3 I From the demand relationship above, you can conclude: Goods X and Y are substitute/complementary goods because_______________________, and a decrease in Py would cause quantity demanded/demand of Good X to increase/decrease. Suppose Py = $5 per unit, and I = $10, and Px = $20. At these...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT