Question

A statistician estimates a demand curve for visits per year to the health club: Qd =...

A statistician estimates a demand curve for visits per year to the health club:

Qd = 50 – 10p + 0.5 y,

where p is the price of towels per visit (in dollars) and y is household income (in thousands of dollars). There are two groups of users. Group A has a mean income of $40 (thousand), and group B has a mean income of $80 (thousand). Members of both groups must pay $2 per towel each time they visit.

(1) The calculated quantities demanded are: Income Expenditure a slope = b 3

(2) Calculate the towel price elasticity for group A members and group B members, separately. Indicate whether it is elastic or inelastic. Which group has relatively more elastic demand for towel?

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
Ralph has a demand curve for office visits (Qd) to the doctor in a year given...
Ralph has a demand curve for office visits (Qd) to the doctor in a year given by Qd = 20 – (P/10) where P is the price of an office visit for Ralph. How many doctor visits would Ralph make if they cost $50? What price would result in Ralph seeing the doctor 10 times in a year?
Ralph has a demand curve for office visits (Qd) to the doctor in a year given...
Ralph has a demand curve for office visits (Qd) to the doctor in a year given by Qd = 20 – (P/10) where P is the price of an office visit for Ralph. If the marginal cost to the doctor for providing each visit is $50, what is the value of the moral hazard cost (hint: area of a triangle) resulting from Ralph buying this insurance?
The demand for pizza in a large town is written as: Qd = 26 - 10P...
The demand for pizza in a large town is written as: Qd = 26 - 10P + 5Pb - Ps + 10Y, where Qd is the quantity demanded, P is the price of pizza, Pb is the price of burittos, Ps is the price of soft drinks sold in the pizza restaurants, and Y is personal income per month (in thousand dollars). Suppose Pb = $4; Ps = $1 and Y = 3 (in thousand dollars) The supply of pizza...
2. A demand curve indicate a. the maximum willingness to pay for a given quantity b.the...
2. A demand curve indicate a. the maximum willingness to pay for a given quantity b.the consumer's gain from exchange c.the market price of a good or service d. the equilibrum quantity 3. trade permitts countries to a. consume more than they capable of producing b.produce based on their comparative advantage c.specialize more fully d.all of above 4. which of the following dose not impact how elastic supply is? a. whether the supply is local or global b.the share of...
In this exercise, you will analyze the supply-demand equilibrium of a city under some special simplifying...
In this exercise, you will analyze the supply-demand equilibrium of a city under some special simplifying assumptions about land use. The assumptions are: (i) all dwellings must contain exactly 1,500 square feet of floor space, regardless of location, and (ii) apartment complexes must contain exactly 15,000 square feet of floor space per square block of land area. These land-use restrictions, which are imposed by a zoning authority, mean that dwelling sizes and building heights do not vary with distance to...
What is Medicare Part C? Provides the aged with home health care Provides the aged with...
What is Medicare Part C? Provides the aged with home health care Provides the aged with prescription drugs Enables low-income aged to participate in Medicaid Provides a voluntary managed care option for the aged How is Medicaid financed? It is financed entirely by the federal government. It is financed entirely by the state. States receive the same percentage of federal support. States with lower per capita incomes receive a greater percentage of federal support If a healthcare system is "free"...
Subject: Human Resource Management Main question: Which benefit plans would you choose, and which wouldn't you...
Subject: Human Resource Management Main question: Which benefit plans would you choose, and which wouldn't you choose and give reasons why you would or would not want a benefit that were used in making the benefit selections (specially at at entry level making $30000). PROCEDURES: Assume that you recently graduated from college and are just starting a new job at a large firm. You will be receiving a starting net pay (net of all taxes and mandatory deductions) of $30,000....
MATHEMATICS 1. The measure of location which is the most likely to be influenced by extreme...
MATHEMATICS 1. The measure of location which is the most likely to be influenced by extreme values in the data set is the a. range b. median c. mode d. mean 2. If two events are independent, then a. they must be mutually exclusive b. the sum of their probabilities must be equal to one c. their intersection must be zero d. None of these alternatives is correct. any value between 0 to 1 3. Two events, A and B,...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT