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- What does a price elasticity of demand of 0.39 mean?The price elasticity of demand for personal computers is estimated to be 2.2. If the price of personal computers declines by 20 percent, what will be the expected percentage increase in the quantity of computers sold?If automobiles and gasoline are complements, then their cross-elasticity coefficient is a. strictly greater than 1. b. positive. c. equal to zero. d. negative.
- Plot the price and quantity data given in the demand schedule of exercise 1. Put price on the vertical axis and quantity on the horizontal axis. Indicate the price elasticity value at each quantity demanded. Explain why the elasticity value gets smaller as you move down the demand curve.If the cross elasticity of demand between bread rolls and cheese is –3,0, this implies that thesegoods areDiscuss how knowledge of price elasticity of demand might be of practical use to a firm selling holiday tours in an island like Mauritius in a period of falling income (low economic situation) following the exposure of COVID-19.
- Calculate the numerical value of cross-price elasticity, exy, in each of the following situations. Do not round your interim calculations before obtaining the final solution (i.e. do not clear your calculator). In each case, express the number to two decimal places and include a negative sign where appropriate (i.e. -1.67, not-1.7 or 1.667) but leave positive values without a plus sign (i.e. 1.67, not +1.67). Identify whether the two products in italics are substitute or complementary products. a. The price Consumer X pays each month for access to the Internet decreases from $50 to $35, causing his quantity demanded of e- magazines he reads on his computer to rise from 4 to 5. The numerical value of cross-price elasticity is The Internet and e-magazines are complementary products. b. The quantity demanded of do-it-yourself hair-cutting sets increases from 5,000 to 15,000 when the average price of a hairstylist's cut rises from $30 to $50 per hour. The numerical value of cross-price…Exercise : Following an increase in it's price, from 10$ to 12$, the demand for a good falls from 10500 to8100 units.What elasticity of demand would you estimate from these data? Calculate its value, first by using the general formula (for discrete changes), then by assuming a constantconstant elasticity of demand (log formula).Calculate the demand for p=9 (note q9 the quantity for p=9), using the general formula then in log of the elasticity calculated in Now, Knowing the value of the direct price elasticity of demand calculated previously, assuming constant costs andcosts and rivals not responding to your price cut, would you have recommended the price cut from 10 to 9?price cut from 10 to 9 ?A recent report by the Centers for Disease Control looked at the relationship between the price of beer and the incidence of new cases of STD's. The report concluded that a beer tax increase of $.20 could reduce overall STD rates by 8.9%. Assume that a six pack cost $5.90 before the price increase. Calculate the cross price elasticity between beer and STD's. What is the sign of this cross-price elasticity? According to your estimate, are beer and STD's compliments or substitutes? Does your answer make sense? Explain.
- Determine the price elasticity of demand between each of the following pricesQUESTION 7 28 C 24 20 16 12 8 4 0 4 8 O a) 1 Ob)-3 Oc)-11 Od) 17/3 O e) 2/11 Of)-2/21 Og) - 3/15.5 Oh)-3/1.5 12 16 20 E 07. Using the midpoint basis, and expressing the answer in fraction or integer format, calculate the elasticity statistic for the responsiveness of E to C changing from 2 to 6The demand for product X is 10 000 pieces for the price of EUR 120. The price has increased to 140 and the demand for the product X has dropped to 8 000 pieces. Calculate the price elasticity of demand.