User Account

All Pages

Calculate point elasticities at prices

Assignment Help Microeconomics
Reference no: EM13137004

1. The demand function for a cola-type soft drink in general is Q= 20 - 2P, where Q stands for quantity and P stands for price.

a. Calculate point elasticities at prices of 5 and 9. Is the demand curve elastic or inelastic at these points?

b. Calculate arc elasticity at the interval between P = 5 and P =6.

c. At which price would a change in price and quantity result in approximately no change in total revenue? Why?

2. ABC Sports, a store that sells various types of sports clothing and other sports items, is planning to introduce a new design of Arizona Diamondbacks' baseball caps.  A consultant has estimated the demand curve to be

Q =2,000 - 100P

where Q is cap sales and P is price.

a. How many caps could ABC sell at $6 each?

b. How much would the price have to be to sell 1,800 caps?

c. Suppose ABC were to use the caps as a promotion. How many caps could ABC give away free?

3. Mr. Smith has the following demand equation for a certain product: Q = 30 - 2P.

a. At a price of $7, what is the point elasticity?

b. Between prices of $5 and $6, what is the arc elasticity?

c. If the market is made up of 100 individuals with demand curves identical to Mr. Smith's, what will be the point and arc elasticity for the conditions specified in parts a and b?

Reference no: EM13137004

Questions Cloud

Project: proposal assignment information : Project: Proposal Assignment Information Objective: To write an effective, persuasive proposal to your target audience in a prescribed format.
Scientific study and cultural beliefs and values : How does Dacy explain the connections between scientific study and cultural beliefs and values? How does the concept of formal science relate to his position?
What was fraction by weight of kbr in the original sample : A mixture of KBr and NaBr weighing 0.560 gm was treated with aqueous Ag+ and all the bromide ion was recovered as 0.970 gm of pure AgBr. What was the fraction by weight of Kbr in the original sample?
Find probability of observing a sample proportion : Suppose the true population proportion is 68%. What is the probability of observing a sample proportion 64% or smaller.
Calculate point elasticities at prices : Calculate point elasticities at prices of 5 and 9. Is the demand curve elastic or inelastic at these points?
How many grams of ammonia are in the flask : A 3.00-L flask is filled with gaseous ammonia,NH3 . The gas pressure measured at 20.0 deg C is 2.05 atm . Assuming ideal gas behavior, how many grams of ammonia are in the flask?
How does application of capital lease accounting provide : What effect do these types of leases have on the balance sheet? What is a capital lease? How does application of capital lease accounting provide insight into a company’s financial health?
What methods are used to allocate the cost : John recently came into a sum of money from an inheritance and is contemplating purchasing a small manufacturing facility in his home town. Not knowing much about running a business, he decided to have lunch with some of the other businesspeople i..
International management accounting conference : Assume the following comments were recently overheard at an international management accounting conference. For each group of comments below, state whether or not you agree with each set of comments, and provide a 2- to 3-paragraph rational for yo..

Reviews

Write a Review

Microeconomics Questions & Answers

  Compute the level of utility enjoyed by consumer a

Find consumer'sA utility maximizing combination of Qax and Qay. At this point compute the level of utility enjoyed by consumer A.

  Maximizes pro t at current price and quantity

Firm A is the sole supplier of a certain product. A's marginal cost equals average cost MC = AC = 30, and it faces market demand given by inverse demand function P = 120 0:5Q. Suppose at the moment A produces quantity q = 120 units at price p = ..

  Money and exchange rates

Evaluate the money multiplier? The central bank decides to increase the money supply (M1) by $200 million through an open market operation.  How much should it buy in bonds?

  Native labourers in long run

What will be the immediate impact on wages in each of the regions in the short run (before any migration between the North and the South occurs)?

  Developing the drug and obtaining fda approval

Despite strong sales and a low marginal cost of producing the product, your company has yet to show a profit from selling the drug.

  What is afc per poster

What is her AFC per poster if she prints 1,000 posters - Karen runs a print shop that makes posters for large companies.

  Information about inelastic demand

Farmers have a relatively inelastic demand for their crops. Suppose there is a bumper crop year (an unusually large harvest).

  Profit-maximization long-run supply curve

Using the firms marginal cost curve, compute the profit-maximization long-run supply curve for typical retailer. Compute the average total cost curve for the typical gasoline retailer, and determine that average total cost are less than price at the..

  Strategies of general electric and future teams

General Electric has frequently placed managers together to work on teams. Often the work project is only for a short period of time.

  Security and encryption

Discuss how Internet security measures can actually create opportunities for criminals to steal, rather than prevent them.

  At what price would the firm earn a normal profit

Construct a table showing the average variable, average total, and marginal costs of paper cup production. Show your work or embed an Excel spreadsheet into your file showing the formulas you used.

  How great employers select and take care of their talent

What can the company do to improve its overall compensation, benefits and professional development practices to enhance the staff's overall effectiveness in meeting the mission and needs of the company?

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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