Question

1. Consider the market for ice-cream. Compare the price elasticity demand for ice cream in

(i) Winter vs (ii) Summer.

Show your answers in two graphs.

2. For the market for oranges, when price rises from $4 to $5, quantity demanded drops from 8 to 7.

(a) Calculate the price elasticity of demand.

(b) Is the demand for oranges elastic?

Answer #1

1. If we talk about the market of ice cream then as we all know that demand will be high in summer as compared to winter

in summer the price elasticity of demand will be elastic in nature

An **Elastic** demand is that type of demand in
which even there is a small change in the price can causes heavy
change in the quantity demanded

in this the consumers are price sensitive

if there is small increase in the price then consumer shift to other substitute

If we talk about in winter then price elasticity of demand is inelastic in nature

An **inelastic** demand is that type of demand in
which even there is very high change in the price will cause a very
low change in the quantity demanded

Determine the price elasticity of demand, the cross-price
elasticity of demand or the income elasticity in the following
scenarios.
a. Consider the market for coffee. Suppose the price rises from
$4 to $6 and quantity demanded falls from 120 to 80. What is price
elasticity of demand? Is coffee elastic or inelastic?
b. John’s income rises from $20,000 to $22,000 and the quantity
of hamburger he buys each week falls from 2 pounds to 1 pound. What
is his income...

In each case below, what is the value of the price elasticity
of demand? Is demand perfectly inelastic, inelastic, unit elastic,
elastic or perfectly elastic?
Price falls by 10%, quantity demanded rises by 8%
Price rises by 3%, quantity demanded falls by 3%
Price rises by 1%, quantity demanded falls by 5%
Price rises by 5%, quantity demanded collapses to zero
Price falls by 2%, quantity demanded does not change

Draw the market for ice cream with 2$ tax on the price of ice
cream on sellers.
Label on your graph the price set by the market, the quantity
set by the market, the price the buyer pays, the price the seller
gets, and the quantity demanded after the tax.
Show the area of consumer surplus.
Show the area of producer surplus.
Show the area of the DWL.
Show the area of the tax revenue

Suppose that the local market for ice cream is competitive and
that all ice cream parlors are identical
A. Using graphs, illustrate a short-run equilibrium in the
market in which ice cream parlors are earning a positive profit.
Your graphs should show the market equilibrium price and quantity
as well as the price, quantity, marginal cost and average total
cost of a typical café.
B. Using your graphs, explain why every ice cream parlor will
produce the quantity for which...

Consider the market for ice cream. For the following
scenarios,draw the graphs to indicate whether the market
equilibrium price and quantity for ice cream will increase or
decrease.
a. A medical report finding that consuming ice cream prevents
the common cold.
b. An increase in the price of milk, an ingredient used to make
ice cream.
c. An increase in the price of whipped cream, a complementary
good of ice cream.
d. An increase in the price of frozen yogurt,...

Consider the market for ice cream. Suppose that the price of
milk (an input into ice cream) increases. Simultaneously, ice cream
consumers’ incomes fall, and these consumers view ice cream as a
normal good. What would you predict will happen to the equilibrium
price of ice cream? To the equilibrium quantity of ice cream?
Explain and draw diagrams to support your answer.

For this question, consider the market
for oranges. Oranges are sold in dozens and the price is in
dollars/dozen. The market is defined by the following:
QD= 4000 – 150P
QS= 3600 = 120P
Calculate the price, the quantity demanded, and the quantity
supplied of oranges when the market is at equilibrium.
Calculate the price elasticity of demand for oranges at
equilibrium.
Calculate the price elasticity of supply at equilibrium.

1)The price elasticity of demand for candles is __________
because as the price of candles rises by 21%, the quantity demanded
of candles falls by 14%.
Group of answer choices
a)inelastic
b)none of the other three answers
c)unitary elastic
d)elastic
2) If the % change in the quantity demanded of bicycles is
greater than the % change in the price of bicycles, then bicycles
are __________ .
Group of answer choices
a)Inelastic
b)Unitary elastic
c)Elastic
d)Infinitely elastic
4)All of the...

1. If the price elasticity of demand for cigarettes is 0.55, and
the price of cigarettes increases by 10 percent, then the quantity
of cigarettes demanded will fall by what percent?
2. If the price elasticity of demand for chicken is 2, then a
20% decrease in the price of chicken will lead to what percentage
increase in the quantity demanded of chicken?
3. When the price of NBA tickets is $25 each, 30,000 tickets are
sold. After the price...

1. What is the numerical value for the price elasticity of
demand if a price change causes no change in quantity
demanded?________ What is the numerical value for elasticity of
demand if a price change causes no change in total revenue?________
What is the elasticity of demand for a horizontal demand
curve?________ What is the elasticity of demand if a price increase
leads to an increase in total revenue? elastic /
inelastic. What is the numerical value for the elasticity...

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 24 minutes ago

asked 36 minutes ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago