Question

Suppose that your analyst estimates the demand equation for good X as given below: ?? ?...

Suppose that your analyst estimates the demand equation for good X as given below: ?? ? = 12 − ?? − 2?? + 1?? + ? Good X sells for $1 per unit, good Y sells for $2 per unit, good Z sells for $1 per unit, and consumer income is $4. a. Using the information provided by your analyst, please determine the demand equation. (Please use graphs to support your answer). b. Please calculate the own price elasticity of demand for good X. Is the demand for good X elastic, inelastic, or unit elastic? (Please indicate where on your graph of the demand equation from part a, your calculation of own-price elasticity lies.) c. If I increase the price of good X by 0.13%, what happens to revenues? (Please use graphs to support your answer.)

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Price Elasticity of Demand for good X: −0.34 Income Elasticity of Demand for good X: 0.56...
Price Elasticity of Demand for good X: −0.34 Income Elasticity of Demand for good X: 0.56 Cross Price Elasticity of Demand for goods X and Y: 0.04 Given the information above, determine the following: 1. whether good X is elastic, unit elastic, or inelastic 2. whether good X follows the “law” of demand 3. whether good X is normal or inferior 4. whether good X is a luxury or a necessity 5. whether good X and good Y are complements,...
1. The Price Elasticity of Demand for a good is −0.78. Which of the following describes...
1. The Price Elasticity of Demand for a good is −0.78. Which of the following describes the Price Elasticity of Demand? Group of answer choices Elastic Inelastic Unit elastic Perfectly elastic 2. The Price Elasticity of Demand for a good is −1.11. Which of the following describes the Price Elasticity of Demand? Group of answer choices Elastic Inelastic Unit elastic Perfectly elastic
Demand in the market for some good is given by the following equation: P=4 Suppose Q=5...
Demand in the market for some good is given by the following equation: P=4 Suppose Q=5 Price elasticity of demand in this market is: A) relatively inelastic B) perfectly inelastic C) relatively elastic D) perfectly elastic
Suppose the relationship between Demand for good x (Qx) can be described by the following linear...
Suppose the relationship between Demand for good x (Qx) can be described by the following linear relationship (Py: price of good y, I = income): Qx= 120 – 6Px + 5Py + 3 I From the demand relationship above, you can conclude: Goods X and Y are substitute/complementary goods because_______________________, and a decrease in Py would cause quantity demanded/demand of Good X to increase/decrease. Suppose Py = $5 per unit, and I = $10, and Px = $20. At these...
Suppose the demand equation for a certain product is given by ?(?) = √(−2? + 300),...
Suppose the demand equation for a certain product is given by ?(?) = √(−2? + 300), where ? is the price ($) and ?(?) is the number of units demanded at that price. a. Find the equation for the elasticity equation. Use it to determine the elasticity of demand for a price of $50 and $100. Describe in words what these mean and tell if the demand is elastic, inelastic, or has unit elasticity. Tell for each what you would...
Suppose demand is given by Q xd = 50 − 4Px + 6Py + Ax, where...
Suppose demand is given by Q xd = 50 − 4Px + 6Py + Ax, where Px = $4, Py = $2, and Ax = $50. (a) What is the quantity demanded of good x? Please show your calculations. (b) What is the own price elasticity of demand (point elasticity) when PX = $4? Is demand elastic or inelastic at this price? Please explain. (c) What is the cross price elasticity of demand between good X and good Y when...
The demand for good X has been estimated by Qxd = 16 − 3Px. Suppose that...
The demand for good X has been estimated by Qxd = 16 − 3Px. Suppose that good X sells at $2 per unit. Calculate the own price elasticity of demand. (5 points)
Suppose demand is given Qxd = 50 - 4 Px + 6Py + Ax, where Px...
Suppose demand is given Qxd = 50 - 4 Px + 6Py + Ax, where Px =$4, Py =$2 and Ax = 50. (a) What is the quantity demanded of good X? Please show your calculations. (b) what is the own price elasticity of demand (point elasticity) when Px = $4? Is demand elastic or inelastic at this price? Please explain. (c) What is the cross price elasticity of demand between good X and good Y when Px = $4...
Suppose the demand function for ice cream (good X) is given by Qx^d= 1200-5Px-0.08Pz+0.04M+3A where Px...
Suppose the demand function for ice cream (good X) is given by Qx^d= 1200-5Px-0.08Pz+0.04M+3A where Px =$40, Px=$100, M=3000, A= 700, Z is a related good, M is income and A is the level of advertising. •determine the own price elasticity, and whether the demand is elastic, inelastic, or unitary elastic? What should managers do to increase their profits? • determine the cross price elasticity between good X and good Z and state whether they are substitutes, or complements and...
1) Firms are interested in the magnitude of the price elasticity of demand coefficient. The magnitude...
1) Firms are interested in the magnitude of the price elasticity of demand coefficient. The magnitude of ?? determines whether the demand for a good or service is elastic, inelastic or unit elastic. For the following cases indicate whether demand is elastic, inelastic or unit elastic. 1 < |??| < ∞ |??| = 1 0 < |??| < 1 2) 2, What happens to the absolute value of the price elasticity of demand as you move up a demand curve?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT