Question
a. Calculate price elasticity given the following information. Is the curve elastic, inelastic or unitary elastic?...
a. Calculate price elasticity given the following information. Is the curve elastic, inelastic or unitary elastic? Original Quantity:9800 lbs of coffee New Quantity: 6500 lbs of coffee Original Price: $10.99/lb New Price: $9.99/lb b. (6 pts) Given the elasticity calculated in part a, will the seller increase or decrease their revenue if they increase the price of coffee? c. (8 pts) Explain the determinants of elasticity.
Homework Answers
Answer #1
The price elasticity of demand is calculatted by the following formula
Price elasticity of demand= 
percentage change= new quantity- old q/ old q*100
new p-old p/old p*100
The price elasticity of demand is 
and this means an increase in the price of the commodity
will decrease the revenue for the seller.
The determinants of the price elasticity of the demand are
1. The availabilty of substitutes- If more clsoe substitutes are available for the commodity it is demand should be elastic and if the close substitutes are less, the elasticity will be less.
2. The proportion of consumer's income- If the consumer spent greater amount of income on the good , the greater will be the elasticity and viceversa.
3. The number of uses of commodity.
4. complementarity between goods
Not the answer you're looking for?
Similar Questions
What is price elasticity of demand? What determines whether a product’s demand is elastic, inelastic, unitary...
What is price elasticity of demand?
What determines whether a product’s demand is elastic, inelastic,
unitary elastic, perfectly elastic and perfectly inelastic? What is
mid-point formula to determine the elasticity of demand and why is
it important to use it instead of the general formula for
elasticity? Carefully explain.
(60)A perfectly inelastic demand curve has an elasticity coefficient of: (a)1 (b)0.25 (c)∞ (d)None of the...
(60)A perfectly inelastic demand curve has an elasticity
coefficient of:
(a)1
(b)0.25
(c)∞
(d)None of the above
Akal mn wahed
Extra Credit Questions-Optional
(61)If the percentage change in the quantity supplied of
a good is less than the percentage change in price, price
elasticity of supply is:
(a)Inelastic
(b)Perfectly inelastic
(c)Elastic
(d)Unitary elastic
(62)If the percentage change in the quantity demanded of
a good is equal to the percentage change in price, price elasticity
of demand is:
(a)Inelastic
(b)Perfectly inelastic...
A product increases the price 13% and reduced the quantity demanded in 3%. Calculate the elasticity....
A product increases the price 13% and reduced the quantity
demanded in 3%. Calculate the elasticity. b. Indicate whether the
curve is elastic, inelastic or unitary. c. Identify the type of
product. d. Indicate whether the increase in price causes an
increase or decrease in income total of the supplier and the
reason.
For a unitary elastic demand curve, the price elasticity of demand is everywhere ___________ and total...
For a unitary elastic demand curve, the price elasticity of demand
is everywhere ___________ and total expenditures on the good
________________ as price increases.
Select one:
a. - 1, decreases
b. - 1, remain constant
c. - 1, increases
d. undefined, increases
3. At the price of $20, the quantity demand of lawn hoses was 100. The price...
3.
At the price of $20, the quantity demand of lawn hoses was 100.
The price increased to $25, and the quantity demanded dropped to
95.
[ The two points on the demand curve are Point A: (100, $20) and
Point B (95, $25).]
a) Calculate the price elasticity of
demand for the hoses. ____________
b) Is it elastic, inelastic or unitary
elastic? _____________
What happens to the total revenue in this
case?_______________
What would happen to the total revenue...
1. What is the numerical value for the price elasticity of demand if a price change...
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...
17. Given the following information will this good be price elastic or price inelastic? Income elastic...
17. Given the following information will this good be price
elastic or price inelastic? Income elastic or income inelastic?
Explain why but no need to calculate the elasticities involved
Quantity demanded
Price is $20
25
Price is $40
20
Income is $40,000
15
Income is $80,000
20
For each of the following situations state whether the good is elastic, inelastic, unitary elastic, perfectly...
For each of the following situations state whether the good is
elastic, inelastic, unitary elastic, perfectly inelastic, or unable
to determine and state which one of the elasticity
rules (not generalizations) you used to make your
determination.
When the price of Reese Peanut Butter Cups falls by 30% Stacey
increases her Reese buying by 30%.
Connor decreased the price of soda at his convenience store
causing the quantity of soda sold to rise giving him 10% more in
revenue.
When...
Given a demand curve of Q=100−2P. 1.Calculate the price at which demand is unit elastic. This...
Given a demand curve of Q=100−2P.
1.Calculate the price at which demand is unit elastic. This
price is___ (Round your answer to two decimal places.)
2. Find the quantity where demand is unit elastic. This quantity
is___ (Round your answer to two decimal places.)
3.At quantities lower than the value found in Part 2, the demand
curve is
Choose one:
A. perfectly elastic.
B. relatively elastic.
C. relatively inelastic.
D. perfectly inelastic.
4.At quantities higher than the value found in...
Categories of Price Elasticity of Demand For each of the following values for price elasticity of...
Categories of Price Elasticity of Demand
For each of the following values for price elasticity of demand,
indicate whether demand is elastic, inelastic, perfectly elastic,
perfectly inelastic, or unit elastic. Also, indicate (increase,
decrease, no effect) what would happen to total revenue if a firm
raised the price in each elasticity range.
Price Elasticity of Demand
equals
Descriptionn of Elasticity
Total Revenue Change
-2.5
-1.0
-0.8
-infinity
0
ADVERTISEMENT
Need Online Homework Help?
Get Answers For Free
Most questions answered within 1 hours.
ADVERTISEMENT
Active Questions
asked 11 minutes ago
asked 12 minutes ago
asked 13 minutes ago
asked 14 minutes ago
asked 17 minutes ago
asked 27 minutes ago
asked 40 minutes ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago