As the price of good X rises from $10 to $12, the quantity demanded of good Y rises from 100 units to 114 units.

As the price of good X rises from $10 to $12, the quantity demanded of good Y rises from 100 units to 114 units.

(a) Are X and Y substitutes or complements?

Using an appropriate example, define what substitute and complimentary goods are.

(b) What is the cross elasticity of demand?

Define Cross Elasticity of demand.
Using the correct formula (show it) calculate the correct answer using the numbers provided.

Expert Solution

Rahul Sunny answered 2 years ago

When the price is $2, the quantity demanded is 10. When the price rises to $8, the quantity demanded falls to 2.

When the price is $2, the quantity demanded is 10. When the price rises to $8, the quantity demanded falls to 2. What is the value of the elasticity of demand? Is it elastic or inelastic?

At a price of $ 80, the quantity demanded of a given good is 200 units....

At a price of $ 80, the quantity demanded of a given good is 200 units. If the price decreases to $ 45, the quantity demanded increases to 225 units. 1. Calculate the value of the price elasticity. 2. Explain what type of claim it is. Explain in detail what managerial action corresponds to take, raise the price, lower it or leave it the same. 3. Make the graphic representation. 4. Answer correctly if it is elastic, inelastic or unitary,...

At a price of $ 80, the quantity demanded of a given good is 200 units....

At a price of $ 80, the quantity demanded of a given good is 200 units. If the price decreases to $ 45, the quantity demanded increases to 225 units. 1. Calculate the value of the price elasticity. 2. Explain what type of claim it is. Explain in detail what managerial action corresponds to take, raise the price, lower it or leave it the same. 3. Make the graphic representation. 4. Answer correctly if it is elastic, inelastic or unitary,...

Compute the price elasticity of demand if price increases from $10 to $12 and quantity demanded...

Compute the price elasticity of demand if price increases from $10 to $12 and quantity demanded falls from 600 to 400. Use the value obtained and a specific example to determine whether price must be increased or decreased to increase total revenue. Explain why. Note: Explain only how to increase total revenue, not decrease it.

Suppose the price of notebooks rises from $2 to $3 and the quantity demanded falls from...

Suppose the price of notebooks rises from $2 to $3 and the quantity demanded falls from 100 to 60. What is the change in total revenue for the firms producing notebooks? How can your answer to this help determine whether the demand for notebooks is elastic or inelastic? As more time passes, the price elasticity of supply becomes more _______________ and (elastic/inelastic) the supply curve becomes _______________. (steeper/flatter)

Price Market Quantity Demanded Social Quantity Demanded ($) (units per month) (units per month) 20 10...

Price Market Quantity Demanded Social Quantity Demanded ($) (units per month) (units per month) 20 10 20 18 20 30 16 30 40 14 40 50 12 50 60 10 60 70 b. Does this product have external benefits or external costs? External benefits c. How large ($) is that externality? ? per unit

1) When income is $100 per week, 10 units of good X are demanded. When income...

1) When income is $100 per week, 10 units of good X are demanded. When income is $150 per week, 15 units of good X are demanded. The income elasticity of demand of good X equals to 11/5 5/11 1 10/15 100/150 2) If goods X and Y are substitutes, then the cross elasticity of demand will be positive negative zero greater than 1 greater than zero but less than 1 3) When the price of silver rises, there will...

1. At a price of $4, quantity demanded is 100; and at a price of $6,...

1. At a price of $4, quantity demanded is 100; and at a price of $6, quantity demanded is 120. Using the midpoint formula, the price elasticity of demand is ________ and demand is ________. A) 0.1; inelastic B) 0.45; inelastic C) -2.2; elastic D) -10; elastic 2. In economics, scarcity means that A) A shortage of a particular good will cause the price to fall. B) A production possibilities curve cannot accurately represent the trade-off between two goods. C) Society's...

If income increases by 12 percent and the quantity demanded of a good then decreases by...

If income increases by 12 percent and the quantity demanded of a good then decreases by 6 percent, the good is: A) inferior and income-inelastic. B) inferior and income-elastic. C) normal and income-inelastic. D) normal and income-elastic.

When the price of beer rises, what happens to the supply, demand, quantity supplied, quantity demanded, and the price in the market for pizza?

Beer and pizza are complements because they are often enjoyed together. When the price of beer rises, what happens to the supply, demand, quantity supplied, quantity demanded, and the price in the market for pizza?

Question

As the price of good X rises from $10 to $12, the quantity demanded of good Y rises from 100 units to 114 units.

Solutions

Expert Solution

Related Solutions

When the price is $2, the quantity demanded is 10. When the price rises to $8, the quantity demanded falls to 2.

At a price of $ 80, the quantity demanded of a given good is 200 units....

At a price of $ 80, the quantity demanded of a given good is 200 units....

Compute the price elasticity of demand if price increases from $10 to $12 and quantity demanded...

Suppose the price of notebooks rises from $2 to $3 and the quantity demanded falls from...

Price Market Quantity Demanded Social Quantity Demanded ($) (units per month) (units per month) 20 10...

1) When income is $100 per week, 10 units of good X are demanded. When income...

1. At a price of $4, quantity demanded is 100; and at a price of $6,...

If income increases by 12 percent and the quantity demanded of a good then decreases by...

When the price of beer rises, what happens to the supply, demand, quantity supplied, quantity demanded, and the price in the market for pizza?