Question

**.** If the equation for a demand curve is
P=45-3Q. What is the elasticity in moving from a quantity of 5 to a
quantity of 6?

**4.** The equation for a demand curve is P=4/Q.
What is the elasticity of demand as price falls from 5 to 4?

**5.** The equation for a supply curve is 2P=Q.
What is the elasticity of supply as price rises from 3 to 4?

**6.** CenturyLink Field has 80,000 seats. What is
the shape of the supply curve for tickets to football games at this
stadium?

**7.** Would you expect supply to play a more
significant role in determining the price of a basic necessity like
food or a luxury item like a watch?

Answer #1

3. P = 45 - 3Q so when Q = 5 the P = 45-3(5) = 30

When Q = 6 then P = 45 - 3(6) = 27.

Elasticity = %∆ quantity / %∆ price.

%∆ price = 30-27/30 × 100 = 3/30×100 = 10%

%∆ quantity = 5-6/5×100 = -(1)/5 × 100 = 20%

So elasticity = 20 / 10 = 2 so Ed = 2.

4. P = 4/Q so when P = 5 then Q = 4/5 = 0.80.

When P = 4 then Q = 4/4 = 1.

%∆ quantity = 0.80-1 / 0.80 × 100 =

-(0.20)/0.80× 100 = 25%

%∆ price = 5-4/4 × 100 = 1/4 × 100 = 20%

Elasticity = 25/20 = 1.25 so Ed = 1.25.

5. 2P = Q when P = 3 then Q = 2(3) = 6

When P = 4 the Q = 2(4) = 8

%∆ qunatity = 6-8/6 × 100 = 33.3%

%∆ price = 3-4/3× 100 = -(1)/3 × 100 = 33.3%

Elasticity = 33.3/33.3 = 1 so Ed = 1.

The equation for a demand curve is P=2/Q. What is the elasticity
of demand as price falls from 5 to 4? What is the elasticity of
demand as the prices falls from 9 to 8? Would you expect the
answers to be the same? Why/why not?

Suppose that the demand equation: P = 6 – Q and supply equation:
P = Q.
a. Calculate the price elasticity of demand at
equilibrium.
b. Calculate the equilibrium price and quantity, and consumer
surplus and producer surplus.
c. Suppose government imposes a unit tax of $1 on producers. Derive
the new supply curve and also calculate the new equilibrium price
and quantity.
d. Calculate tax revenue and the deadweight loss of this tax.

Suppose the demand for a product is given by 2p^3q =
500,000+500p^2 where p is price in dollars
and q is the number of units sold..
a. Find the price elasticity of demand when p =$50.

Graph a typical linear (that means straight line) supply and
demand curve for the tickets to a 100,000 seat stadium. Assume that
the # of seats in the stadium is fixed at the beginning, and price
of each ticket is $50. Label each axis properly and denote
equilibrium price and quantity, P* and Q*, respectively. Now,
consider that the ticket we just drew the supply and demand for, is
a normal good. Suppose the average household income goes down in...

Assume that demand for a commodity is represented by the
equation P = 20 – 0.6 Q d, and supply by the equation P = 10 + 0.2
Qs where Qd and Q s are quantity demanded and quantity supplied,
respectively, and P is the Price. Use the equilibrium condition Qs
= Qd
1: Solve the equations to determine equilibrium price.
2: Now determine equilibrium quantity.
3. Make a Table of points and then graph the following
4. Graph Demand...

1. Consider a demand curve of the form QD = 40 - 2P, where QD is
the quantity demanded and P is the price of the good. The supply
curve takes the form of QS = -4 + 2P, where QS is the quantity
supplied, and P is the price of the good. Be sure to put P on the
vertical axis and Q on the horizontal axis. a. What is the
equilibrium price and quantity? Draw out the supply...

The demand curve of a perfectly competitive product is
described by the equation:
P = $1000 – Q where Q =
thousands
The supply curve is given by
P = $100 + 2Q where Q =
thousands
Graph the demand and supply curves; use a grid size of 100.
Calculate the equilibrium price and quantity (carefully state the
units). Find the consumer surplus CS, the producer surplus
PS, and the deadweight loss DWL, carefully stating the units.

Suppose the demand curve for a product is given by the equation
Qd = 30/P. Compute the quantities demanded at prices of
$1, 2, 3, 4, 5, and 6. Graph the demand curve. Use the arc method
to calculate the price elasticity of demand between $1 and $2, and
between $5 and $6. How does this demand curve compare to the linear
demand curve?

Q: The domestic demand for salmon in the U.S. has an inverse
demand curve of p = 150 -3Q. The domestic supply of salmon has an
inverse supply curve of p = .50Q. The price is $ per pound of
salmon and Q is in millions of pounds of salmon. Assume that the
market for salmon is perfectly competitive in a global
marketplace.
a. Provide a graph of the domestic supply and demand for salmon
and then calculate and show...

1.Price elasticity of demand is defined as:
Multiple Choice
a.the slope of the demand curve.
b.the slope of the demand curve divided by the price.
c.the percentage change in price divided by the percentage
change in quantity demanded.
d.the percentage change in quantity demanded divided by the
percentage change in price.
2. The Midpoint Method for Elasticity uses which of the
following?
Multiple Choice
a.Average percentage change in price only
b.Average percentage change in quantity only
c.Average percentage change in...

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 2 minutes ago

asked 37 minutes ago

asked 40 minutes ago

asked 48 minutes ago

asked 50 minutes ago

asked 1 hour ago

asked 1 hour ago

asked 2 hours ago

asked 2 hours ago

asked 2 hours ago

asked 2 hours ago

asked 2 hours ago