Use the midpoint formula to calculate the price elasticities

Assignment Help Microeconomics
Reference no: EM131020486

You own a hot dog stand that you set up outside the student union every day at lunchtime. Currently, you are selling hot dogs for a price of $3 each, and you sell 30 hot dogs a day. You are considering cutting the price to $2. The following graph shows two possible increases in the quantity sold as a result of your price cut. Use the information in the graph to calculate the price elasticity between these two prices on each of the demand curves. Use the midpoint formula to calculate the price elasticities.

753_elastic.png

Reference no: EM131020486

Questions Cloud

Estimates the probability of making a claim : When all factors are taken into account, an insurance company estimates that the probability of my father making a claim for damages to his pontoon boat for 5000 is 0.1.
What is the annual contribution to gdp : Susie takes care of Rachel's children and earns $30,000 a year that she reports on her income taxes. What is the annual contribution to GDP given this information
Is the demand for places in pace freshman class elastic : Assuming that the demand curve for places in the freshman class at Pace did not shift between 2005 and 2006, calculate the price elasticity of demand. Use the midpoint formula in your calculation. Is the demand for places in Pace's freshman class ..
Make a reasonable estimate of the possible loss : Seattle Chocolates has been sued for $100,000 in a contract dispute. It is not possible at this time, however, to make a reasonable estimate of the possible loss, if any, that the company may have sustained.
Use the midpoint formula to calculate the price elasticities : The following graph shows two possible increases in the quantity sold as a result of your price cut. Use the information in the graph to calculate the price elasticity between these two prices on each of the demand curves. Use the midpoint formula..
Assuming joint venture will be located in nigeria : Store Norske is considering forming a joint venture company with Coal India Limited, jointly owned 50% each. What issues will the new company have to address in doing business assuming the joint venture will be located in the Nigeria? Discuss.
What is the percentage price change of bonds : Bond J is a 7 percent coupon bond. Bond K is a 13 percent coupon bond. Both bonds have 20 years to maturity, make semiannual payments, and have a YTM of 10 percent. If interest rates suddenly rise by 2 percent, what is the percentage price change of ..
Calculate the price elasticity of demand for rye : Calculate the change in the quantity of rye demanded divided by the change in the price of rye, but this time measure the quantity of rye in millions of bushels. Compare your answer to the one you computed in (a).
What are the three biggest risks the firm faces : Explain how the business risks differ between traditional tax and audit services and management consulting services. In your opinion, what are the three biggest risks the firm faces if it diversifies into the new service line?

Reviews

Write a Review

Microeconomics Questions & Answers

  The free rider problem

Question: Explain why the free rider problem makes it difficult for perfectly competitive markets to provide the Pareto efficient level of a public good.

  Failure of the super committee is good thing for economy

Some commentators have argued that the failure of the “Super committee” is good thing for the economy?  Do you agree?

  Case study analysis about optimum resource allocation

Case study analysis about optimum resource allocation: -  Why might you suspect (even without evidence) that the economy might not be able to produce all the schools and clinics the Ministers want? What constraints are there on an economy's productio..

  Fixed cost and vairiable cost

Questions:  :   Which of the following are likely to be fixed costs and which variable costs for a chocolate factory over the course of a month?  Explain your choice.

  Problem - total cost, average cost, marginal cost

Problem - Total Cost, Average Cost, Marginal Cost: -  Complete the following table of costs for a firm.  (Note: enter the figures in the  MC   column  between  outputs of  0 and 1, 1 and 2, 2 and 3, etc.)

  Oligopoly and demand curve problem

Problem based on Oligopoly and demand curve,  Draw and explain the demand curve facing each firm, and given this demand curve, does this mean that firms in the jeans industry do or do not compete against one another?

  Impact of external costs on resource allocation

Explain the impact of external costs and external benefits on resource allocation;  Why are public goods not produced in sufficient quantities by private markets?  Which of the following are examples of public goods (or services)? Delete the incorrec..

  Shifts in demand and movements along the demand curve

Describe the differences between shifts in demand and movements along the demand curve. What are the main factors which can shift the demand curve? Explain why they cause the demand curve to shift. Use examples and draw graphs to support your discuss..

  Article review question

Article Review Question: Read the following excerpts from the article "Fruit, veg costs surge' by Todd, Dagwell, published in the Herald on January 25th 2011 and answer questions below:

  Long-term growth, international trade & globalization

Long-term Growth, International Trade & Globalization:- This question deals with concepts such as long-term growth, international trade and globalization. Questions related to trade deficit, trade surplus, gains from trade, an international trade sce..

  European monetary union (emu) in crisis

"Does the economic bailout of Spain and Greece spell the beginning of the end for the European Monetary Union (EMU)?"

  Development game “settlers of catan”

Read the rules of the game, the overview and the almanac for the Development Game "Settlers of Catan"

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd