Price Elasticity of Demand (Ed) Ignore the MINUS sign in the coefficient for Price Ed 1. When bicycles were $50, the quantity was 20/day, however, when the price rose to $60 the Quantity Demanded dropped to 15. Calculate coefficient: Cite Elasticity: Elastic What happens to TOTAL REVENUE: TR decreases Calculate coefficient: 2. When price drops from $1.00 to $.70, Quantity Demanded increased from 50 to 75 units. Cite Elasticity: Calculate coefficient: What happens to TOTAL REVENUE: 3. Price dropped from $0.70 to $0.60 and Quantity Demanded rose from 10 to 12 units. Cite Elasticity: (QD (NEW) -QD(OLD))/[(QD(NEW)+QD(OLD))/2] (P(NEW) -P(OLD)) /[(P(NEW)+P(OLD))/2] (15 – 20) / [(15 +20)/2] = -5/17.5 = -.286 = -1.57 (60 -50) / [(60 +50)/2] 10 / 55 .182 Calculate coefficient: What happens to TOTAL REVENUE: 4. Price rises from $1.50 to $2 and Quantity Demanded decreases from 1000 to 900 units. Cite Elasticity: What happens to TOTAL REVENUE: EXPLAIN: 5. When Cottonwood City Transit Authority raised bus fares, its total revenue increased, which shows that demand for travel is: ELASTIC/INELASTIC
Price Elasticity of Demand (Ed) Ignore the MINUS sign in the coefficient for Price Ed 1. When bicycles were $50, the quantity was 20/day, however, when the price rose to $60 the Quantity Demanded dropped to 15. Calculate coefficient: Cite Elasticity: Elastic What happens to TOTAL REVENUE: TR decreases Calculate coefficient: 2. When price drops from $1.00 to $.70, Quantity Demanded increased from 50 to 75 units. Cite Elasticity: Calculate coefficient: What happens to TOTAL REVENUE: 3. Price dropped from $0.70 to $0.60 and Quantity Demanded rose from 10 to 12 units. Cite Elasticity: (QD (NEW) -QD(OLD))/[(QD(NEW)+QD(OLD))/2] (P(NEW) -P(OLD)) /[(P(NEW)+P(OLD))/2] (15 – 20) / [(15 +20)/2] = -5/17.5 = -.286 = -1.57 (60 -50) / [(60 +50)/2] 10 / 55 .182 Calculate coefficient: What happens to TOTAL REVENUE: 4. Price rises from $1.50 to $2 and Quantity Demanded decreases from 1000 to 900 units. Cite Elasticity: What happens to TOTAL REVENUE: EXPLAIN: 5. When Cottonwood City Transit Authority raised bus fares, its total revenue increased, which shows that demand for travel is: ELASTIC/INELASTIC
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter3: Demand Analysis
Section: Chapter Questions
Problem 8E: The Stopdecay Company sells an electric toothbrush for $25. Its sales have averaged 8,000 units per...
Related questions
Question
please help me do this worksheet
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 1 images
Follow-up Questions
Read through expert solutions to related follow-up questions below.
Follow-up Question
- When Cottonwood City Transit Authority raised bus fares, its total revenue increased, which shows that
demand for travel is: ELASTIC/INELASTIC
EXPLAIN:
Solution
by Bartleby Expert
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Managerial Economics: Applications, Strategies an…
Economics
ISBN:
9781305506381
Author:
James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:
Cengage Learning
Essentials of Economics (MindTap Course List)
Economics
ISBN:
9781337091992
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Exploring Economics
Economics
ISBN:
9781544336329
Author:
Robert L. Sexton
Publisher:
SAGE Publications, Inc
Managerial Economics: Applications, Strategies an…
Economics
ISBN:
9781305506381
Author:
James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:
Cengage Learning
Essentials of Economics (MindTap Course List)
Economics
ISBN:
9781337091992
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Exploring Economics
Economics
ISBN:
9781544336329
Author:
Robert L. Sexton
Publisher:
SAGE Publications, Inc
Principles of Economics 2e
Economics
ISBN:
9781947172364
Author:
Steven A. Greenlaw; David Shapiro
Publisher:
OpenStax