2. Do you think a) the supply and b) the demand for sugar is price elastic...

2. Do you think a) the supply and b) the demand for sugar is price elastic or inelastic? Justify your choices and explain whether this means any given change in supply or demand will have a bigger effect on the equilibrium price of quantity.

Expert Solution

The demand for certain goods are considered as inelastic if the quantity demanded doesn't change more by a change in the price. The supply of any good is considered inelastic of the supplier can't increase the production of that goods quickly with a change in the price of the good.

The demand and supply of Sugar are both elastic. The demand for sugar is elastic because any increase in the price of the sugar will not affect the demand for the sugar more. The supply of the sugar is inelastic because if the price of the sugar changed it will take the farmers and other producers almost a year to increase the production of the sugar.

If the demand for the sugar changed i.e. increased it will lead to a big change in the price of sugar because the supply can't fulfill the extra demand immediately. it will lead to a bigger effect on the equilibrium price.

Similarly, if the demand decreased it will take time to decrease the supply of sugar. Again it will decrease the equilibrium price by a huge amount. There will be a big impact on the price of sugar.

Rahul Sunny answered 2 years ago

The demand for salt is price inelastic and the supply of salt is price elastic. The...

The demand for salt is price inelastic and the supply of salt is price elastic. The demand for caviar is price elastic and the supply of caviar is price inelastic. Suppose that a tax of $1 per pound is levied on the sellers of salt and a tax of $1 per pound is levied on the buyers of caviar. We would expect that most of these taxes will be paid by the _________ of salt and the ________ of caviar....

B. In each of the following cases, do you think the price elasticity of supply is...

B. In each of the following cases, do you think the price elasticity of supply is (i) perfectly elastic; (ii) perfectly inelastic; (iii) elastic, but not perfectly elastic; (iv) inelastic, but not perfectly inelastic? Explain your answer. An increase in demand this summer for domestic travel leads to a huge jump in the price of motel rooms. The price of a kilowatt of electricity is the same during periods of high electricity demand as during periods of low electricity demand....

Do you think the price elasticity of either supply or demand for airline flights to France...

Do you think the price elasticity of either supply or demand for airline flights to France (from the U.S.) will increase, decrease, or remain the same for each event? Explain your answer. Relations between the US and France break down, causing Americans to need an expensive visa to visit. The price of oil for airlines increases. The price of baguettes falls. The French real estate market takes a dive, causing AirBnB and hotel prices to drop significantly.

Draw a supply and demand diagram with a perfectly elastic Supply. a- Determine the equilibrium price...

Draw a supply and demand diagram with a perfectly elastic Supply. a- Determine the equilibrium price and quantity on your graph. Label the relevant area of the graph with letters and determine consumer surplus, producer surplus and total surplus of the market at the equilibrium. b- Show that any deviation from the equilibrium results in a decrease in total surplus. c- Show the change in consumers, producers, and total surplus of the market as a result of an upward shift...

If the demand for a product is inelastic but the supply is elastic, the ________ will...

If the demand for a product is inelastic but the supply is elastic, the ________ will bear the tax incidence. A) government B) producer C) consumer

2. If know a market has price elastic demand. will draw the demand curve with a....

2. If know a market has price elastic demand. will draw the demand curve with a. A relatively flat negative slope b. A relatively steep negative siope c. A relatively flat positive slope d. A relatively steep positive slope Suppose I tell you that the price elasticity demand for oranges is around 1.5, for bananas is around 0.7 for melons is of healthier (by eating more fruit and can only aff around 0. 3 We want people to eat to...

The demand for salt is inelastic, and the supply of salt is elastic. The demand for...

The demand for salt is inelastic, and the supply of salt is elastic. The demand for caviar is elastic, and the supply of caviar is inelastic. Suppose that a tax of $1 per pound is levied on the sellers of salt, and a tax of $1 per pound is levied on the buyers of caviar. We would expect that most of the burden of these taxes will fall on . buyers of salt and the buyers of caviar. buyers of...

2. Elastic, inelastic, and unit-elastic demand

2. Elastic, inelastic, and unit-elastic demand The following graph shows the demand for a good For each region on the graph given in the following table, use the midpoint method to identify whether the demand for this good is elastic, (approximately) unit elastic, or inelastic. True or False: The value of the price elasticity of demand is not equal to the slope of the demand curve.

In each of the following cases, do you think the price elasticity of supply is (1)...

In each of the following cases, do you think the price elasticity of supply is (1) perfectly elastic; (2) perfectly inelastic; (3) elastic, but not perfectly elastic; or (4) inelastic, but not perfectly inelastic? a. An increase in demand this summer for luxury cruise leads to a huge jump in the sales price of a cabin on the Queen of Oak Bay b. The price of a kilowatt of electricity is the same during periods of high electricity demand as...

given the demand function, Q=20-2p, find the price range for which a) demand is elastic b)...

given the demand function, Q=20-2p, find the price range for which a) demand is elastic b) demand is inelastic c) demand is unit elastic d) if the firm increases the price to £7, is the total revenue increasing or reducing?

Question