Determine the price elasticity of demand for paint

Assignment Help Econometrics
Reference no: EM13234623

Suppose you are a painter, and the price of a gallon of paint increases from $3.00 a gallon to $3.50 a gallon. Your usage of paint drops from 35 gallons a month to 20 gallons a month. Perform the following:

1. Compute the price elasticity of demand for paint and show your calculations.

2. Decide whether the demand for paint is elastic, unitary elastic, or inelastic.

3. Explain your reasoning and interpret your results.

Reference no: EM13234623

Questions Cloud

What is the ph of hydrocyanic acid solution : A solution contains .294 M solution sodium cyanide and .0919 M hydrocyanic acid. What is the pH of this solution.
What frequency change is found by the speed detector : A car moving at 150km/h (93mph) is approaching a stationary police car whose radar speed detector operates at a frequency of 15Ghz
Explain electrolytic cells for producing aluminum operate : Commercial electrolytic cells for producing aluminum operate at 5 volts and 100,000 Amperes. How long does it take to produce 1000 kilograms of aluminum
Describe the events that could create the sequence : an economy has an unemployment rate of4 percent and an inflation rate of 5 percent a year at point A on a graph. Some events occur that move the economy in a clockwise loop from A to B to D to C and back to A.
Determine the price elasticity of demand for paint : Suppose you are a painter, and the price of a gallon of paint increases from $3.00 a gallon to $3.50 a gallon. Your usage of paint drops from 35 gallons a month to 20 gallons a month. Perform the following
What is the electrostatic force : Two small identical conducting spheres are placed with their centers 0.78 m a part, The spheres are connected by a conducting wire, What is the electrostatic force between the two after equilibrium is reached
Cases of prostate cancer : You are the chief epidemiologist at a local county health department. One day, you receive a phone call from Mrs. Hudson, a resident of the northern part of a nearby town with a population of 25,000. She believes there is a cancer cluster in her c..
Explain chromium from an electrolytic bath containing : A technician is plating a faucet with 0.86 grams of chromium from an electrolytic bath containing aqueous Cr2(SO4)3. If 12.5 minutes is allowed for the operation, what current is needed
What are some of the strategies companies employ to manage : What are some of the strategies companies employ to manage risks of terrorism? Imagine that you work for a MNC that faces terrorism risks. How would you apply those strategies to minimize the risks?

Reviews

Write a Review

Econometrics Questions & Answers

  Equation for the monopolist''s marginal revenue funtion

A monopolist's inverse demand function is P = 150 - 3Q. The company produces output at two facilities; the marginal cost of producing at facility 1 is MC1(Q1) = 6Q1, and the marginal cost of producing at facility 2 is MC2(Q2) = 2Q2. Provide the eq..

  Determine unit production costs for material and conversion

The ending inventory units were 100% complete as to material and 50% complete as to labor. overhead is applied to production at the rate of 60% of direct labor cost. determine the unit production costs for material and conversion.

  Construct and show a gross margin budget

Construct and show a gross margin budget for the activity. Construct and show a whole farm budget. Advise the farmer on the current and future profitability of the farm and possible options to improve performance.

  Will there be an income and a substitution effect at work

Pam has chosen her best affordable combination of cookies and comic books. She spends all of her income on 30 cookies at $1 each and 5 comic books at $2 each. The price of a cookie falls to 50 cents and the price of a comic book rises to $5.

  What is opportunity cost to student of allocating study time

(a) what is the opportunity cost to this student of allocating enough additional study time on economics to move her grade up from a 90 to a 100 (b) draw a production possibilities curve showing the opportunity cost.

  Determine the rm''s marginal product of labor curve

Derive the rm's marginal product of labor curve. Derive the rm's average product of labor curve. If the rm has an output quota of 5,120 widgets, how many laborers must it employ in the short-run to achieve this level of production?

  Compute the before tax rate of return

A special power tool for plastic produces costs 400, has a 4 year useful life, no salvage value and a 2-year-before tax payback period. Assume uniform annual end of the year benefits. A. Compute the before tax rate of return

  What is the official unemployment rate

Assume the following data for a country: total population, 500; population under 16 years of age or institutionalized, 120; not in labor force, 150; unemployed, 23; part-time workers looking for full-time jobs, 10. What is the size of the labor fo..

  Determine what is each players dominant strategy

Use the information in the following table, which summarizes the payoffs (i.e., profit) to two firms that must decide between an average Firm 2 Average Quality High Quality Firm 1 Average Quality 600, 600 400, 1100High Quality 1100, 400 900, 900 a. ..

  Find the present worth of all the costs

The construction of a dam will cost $1,000 at time 0, $500 in year 1, $500 in year 2. It will be completed at the end of year 2. Beginning in year 3, maintenance costs will be $100 per year through year 10. From years 11 on, maintenance costs will..

  What is the present worth of the project using marr

A new machine is to be purchased for $150,000. The company believes it will generate $60,000 annually in revenue due to the purchase of this machine. The company will have to train an operator to run this machine

  What is the elasticity on the part of animal owners

VetPharm has historically produced and sold drugs for animals; however, one of its products developed for animal use has recently been approved for a similar use in humans. Market research has revealed that at the current per dose price.

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