Estimated the price elasticity of demand for illegal drug
Course:- Business Economics
Reference No.:- EM13891937

Assignment Help
Assignment Help >> Business Economics

Microeconomics Ch-6 Web Activity 1

A Rand Corporation study of cocaine estimated the price elasticity of demand for this illegal drug.

A) Given the price elasticity of demand estimate provided in this report, is the demand for cocaine considered to be elastic, inelastic or unit elastic?

B) Using the list of determinants of elasticity found in the text, what is the most likely explanation for the elasticity estimate in the Rand Corporation study?

C) Draw a demand curve for cocaine that demonstrates the elasticity estimate you found for part a.

D) How does the measured elasticity affect the policies recommended in the report?

Put your comment

Ask Question & Get Answers from Experts
Browse some more (Business Economics) Materials
What are price indexes design to measure? Out-line how they are constructed. When GDP and other income figures are compared across time periods?
Power stations emit sulfur dioxide as a waste product. This generates a cost to society that is not paid for by the firm; therefore, pollution is a negative externality of pow
Theory suggests that, in the absence of market failures, placing an excise tax on the market for a good leads to a deadweight loss for society. Think about a situation where t
Write a first draft. Describe the topic and your response to someone else, and inquire about whether it makes sense and flows well. Edit your first draft, taking into accoun
Create a 4 slide Microsoft® PowerPoint® presentation that will be presented to the Morgan Stanley's Executive Committee. The presentation should cover the following items:Ev
According to the BLS, the CPI rose 3.8% in August of this year compared to a year earlier. Food prices rose 4.6% and clothing prices were up 4.2%, while new car prices rose 3.
You have been hired to manage a small manufacturing facility whose cost and production data are given in the table below. (20 points) Workers Total Labor Cost Output Total Rev
Analyze the working capital of the health care organization you selected. Evaluate the impact of regulations, business plans, and economic dynamics on the working capital re