3. The quantity demanded for chickens decreased by 2% when prices rose by 8%. By substituting,...

3. The quantity demanded for chickens decreased by 2% when prices rose by 8%. By substituting, in the equation Ep, the result is (-.50). Notice a negative result.

              a) Why is there an inverse relationship between quantity and price?


              b) is elastic or inelastic.


              c) What does a ratio of change of 8: 2 mean?

Solutions

Expert Solution

Rahul Sunny answered 1 year ago

Next > < Previous

Related Solutions

The quantity of demand for chickens fell by 2% when prices rose by 8%. By substituting,...

The quantity of demand for chickens fell by 2% when prices rose by 8%. By substituting, in the equation Ep, the result is (-.50). Notice a negative result. a) Why is there an inverse relationship between quantity and price? b) is elastic or inelastic. c) What does a ratio of change of 8: 2 mean? 4. If a 12% increase in the price of grapefruit juice causes a 22% decrease in the quantity of grapefruit juice demanded. On the other...

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?

Q73. the price is 3, the quantity demanded is 8. When the price is 6, the...

Q73. the price is 3, the quantity demanded is 8. When the price is 6, the quantity demanded is 4. What is the price elasticity of When demand? ------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Q74. A perfectly inelastic demand curve will be ---------------- on a graph while a perfectly elastic demand curve will be ------------------on a graph. a. vertical; horizontal b. horizontal; vertical c. vertical; vertical d. horizontal; horizontal Q75. When demand is price-inelastic, a price decrease will result in: a. an increase in...

Use the table below to answer questions 1 and 2. Price Quantity Demanded Quantity Supplied $8...

Use the table below to answer questions 1 and 2. Price Quantity Demanded Quantity Supplied $8 200 1,000 $6 400 800 $4 600 600 $2 800 400 1. Setting a price floor of $8 would cause a market surplus in the amount of: a. 400 units. b. 500 units. c. 600 units. d. 800 units. 2. Setting a price ceiling of $2 would cause a market shortage in the amount of: a. 400 units. b. 500 units. c. 600 units....

When economists speak of "quantity demanded" in a particular market they refer to Question 8 options:...

When economists speak of "quantity demanded" in a particular market they refer to Question 8 options: A) how much of an item sellers are willing to sell at a given price. B) the whole demand curve or schedule. C) how much of an item buyers want to buy at a given price. D) the change in output relative to the change in inputs.

Price ($) Quantity Demanded Quantity Supplied 0 25 0 1 21 1 2 17 3 3...

Price ($) Quantity Demanded Quantity Supplied 0 25 0 1 21 1 2 17 3 3 13 6 4 9 9 5 5 12 6 1 15 7 0 18 Question: Suppose the government sets a price in this market at $2. a. Is this a price floor or a price ceiling? b. Does this create a shortage or surplus? c. What is the difference in quantity demanded at this $2 price relative to the market price? d. What is...

The table below shows price and quantity data for a hypothetical economy. Quantity Demanded 2018 Prices...

The table below shows price and quantity data for a hypothetical economy. Quantity Demanded 2018 Prices 2017 (base year) Prices 2018 (current year) 10 kilograms (kg) coffee $6/kg $2/kg 10kg tea $4/kg $4/kg Assume that a typical consumer’s food basket contains only coffee and tea. Moreover, assume that consumers are completely indifferent between coffee and tea. If the official “food inflation rate” for 2018 is calculated using a Paasche index, the substitution bias is demonstrated by the fact that the...

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)

The concept of “market equilibrium” is defined as when the quantity of a commodity demanded is...

The concept of “market equilibrium” is defined as when the quantity of a commodity demanded is equal to the quantity supplied. Assume that the demand function and the supply function are both linear. How can good advertising affect market equilibrium? How can bad advertising affect market equilibrium?

Price (RM) Quantity demanded (tonnes) Quantity supplied (tonnes) 1 90 30 2 75 45 3 60...

Price (RM) Quantity demanded (tonnes) Quantity supplied (tonnes) 1 90 30 2 75 45 3 60 60 4 45 75 5 30 90 6 15 105 (a) What is the equilibrium price and quantity? [4 marks] (b) Calculate the revenue received by the seller at equilibrium. [4 marks] (c) Due to medical journals reporting that wheat is good for health, the quantity demanded is increased by 30 tonnes. (i) Calculate the new quantity demanded. [2 mark] (ii) What is the...

Subjects