Question

“New drive-in movie theatres could be popping up by June” (Griffin, K., Vancouver Sun Newspaper, Thursday, May 14, 2020, p. A3). “Metro Vancouverites may soon be able to take their cars to watch movies at several new drive-in theatres. A group led by Howard Blank and ‘Point Blank Shows’ is looking at opening contemporary drive-ins around the region, including in Vancouver, Abbotsford, Langley, Burnaby, and West Vancouver. Blank said all local governments have responded favourably to the idea subject to a wait-and-see attitude and final approvals from Vancouver Coastal Health and Fraser Health, the two health authorities covering the region. In the first In-Term Exam, we determined the Inverse Demand Curve to be: P = 82.1429 – 0.1429[Qd]. i. Given the Inverse Demand curve provided above, Determine the Normal Demand curve and with the Normal Demand curve, Determine the Quantity Demanded, Qd at EACH of P1 = $25.50 and P2 = $26.50. Rounding the values to only TWO Decimal Places. ii. Given the two Prices, P from part (i), and the Quantity Demanded, Qd determined for each price, Calculate the “ARC” Price Elasticity of Demand. Use at least 4 decimal places throughout the calculation. iii. Using ONLY ONE OF the Quantities Demanded, Qd either P = $25.50 OR at P = $26.50, Calculate the “POINT” Price Elasticity of Demand. Use at least 4 decimal places throughout the calculation. iv. Given the SIGN and the MAGNITUDE (number) found in part (iii), Briefly explain the interpretation or meaning of the sign AND of the magnitude (number).

Answer 1