Question
In: Economics
Suppose the own price elasticity of demand for milk is -0.75. (a) What happens to quantity...
Suppose the own price elasticity of demand for milk is -0.75.
(a) What happens to quantity demanded and total revenue if the price increased by 10%?
(b) If the own price elasticity of supply is -1.5, who would be more affected by a 50 cent tax on milk, collected from sellers?
Solutions
Rahul Sunny answered 1 year agoRelated Solutions
Suppose the own price elasticity of demand for good X is −0.25, and the quantity of...
Suppose the own price elasticity of demand for good X is −0.25,
and the quantity of good X increases by 5 percent. What would you
expect to happen to the total expenditures on good X? Please
explain and show any calculations.
What happens to the long-run equilibrium price and quantity of cashew milk if almond milk becomes...
What happens to the long-run equilibrium price and quantity of
cashew milk if almond milk becomes more expensive AND cashews (that
are used in the production of cashew milk) less expensive?
Price increases and the change in quantity is ambiguous.
Price decreases and the change in quantity is ambiguous.
Quantity increases and the change in price is ambiguous.
Quantity decreases and the change in price is ambiguous.
QUESTION 7
If the price elasticity of demand is 2, what is the...
Big G cereal recently believes the own price elasticity of demand for its cereal is -0.75....
Big G cereal recently believes the own price elasticity of
demand for its cereal is -0.75. As evidence, Big G management
points to a recent price increase of 3% which resulted in a decline
of the total volume of cereal by 2.5%. As an outside consultant,
you need to determine the veracity of Big G’s conclusion. Provide
evidence to support or refute Big G’s statement.
Suppose the own price elasticity of demand for good X is -5, its income elasticity is...
Suppose the own price elasticity of demand for good X
is -5, its income elasticity is 2, its advertising elasticity is 4,
and the cross-price elasticity of demand between it and good
Y is 3. Determine how much the consumption of this good
will change if:
Instructions: Enter your responses as percentages. Include a minus
(-) sign for all negative answers.
a. The price of good X decreases by 5 percent.
percent
b. The price of good Y increases by...
Suppose the own price elasticity of demand for good X is -2, its income elasticity is...
Suppose the own price elasticity of demand for good X
is -2, its income elasticity is -1, its advertising elasticity is
2, and the cross-price elasticity of demand between it and good
Y is -3. Determine how much the consumption of this good
will change if:
Instructions: Enter your responses as percentages. Include a minus
(-) sign for all negative answers.
a. The price of good X decreases by 4 percent.
percent
b. The price of good Y increases by...
Suppose the own price elasticity of demand for good X is -2, its income elasticity is...
Suppose the own price elasticity of demand for good X
is -2, its income elasticity is -1, its advertising elasticity is
2, and the cross-price elasticity of demand between it and good
Y is -3. Determine how much the consumption of this good
will change if:
Instructions: Enter your responses as percentages. Include a minus
(-) sign for all negative answers.
a. The price of good X decreases by 4 percent.
_______percent
b. The price of good Y increases by...
Suppose the own price elasticity of demand for good X is -2, its income elasticity is...
Suppose the own price elasticity of demand for good X
is -2, its income elasticity is 3, its advertising elasticity is 4,
and the cross-price elasticity of demand between it and good
Y is -6. Determine how much the consumption of this good
will change if:
Instructions: Enter your responses as percentages. Include a minus
(-) sign for all negative answers.
a. The price of good X decreases by 5 percent.
______ percent
b. The price of good Y increases...
2. Suppose the own price elasticity of demand for good X is 2, its income elasticity...
2. Suppose the own price elasticity of demand for good X is 2,
its income elasticity is 3, and the cross price elasticity of
demand between it and good Y is 6. Determine how consumption
demand for the good will change if:
a) The price of good X increases by 5 percent. b) Consumer
income falls by 3 percent.
c) The price of good Y increases by 10 percent. d) Is good Y a
substitute or a complement?
_________________________________________________
_________________________________________________...
Suppose the income elasticity of demand for food is 0.5 and the price elasticity of demand...
Suppose the income elasticity of demand for food is 0.5 and the
price elasticity of demand is -1.0. Suppose a hypothetical group of
people spend $10,000 a year on food, the price of food is $2, and
that their total income is $25,000.
a. If a sales tax on food caused the price of food to increase
to $2.50, what would happen to their consumption of food?
b. Suppose they will get a tax rebate of $2500 to ease the...
What is elasticity? What is price elasticity of demand? What is price elasticity of supply?
What is elasticity? What is price elasticity of demand? What is
price elasticity of supply?
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