### Estimate the price elasticity coefficient

Assignment Help Macroeconomics
##### Reference no: EM1312178

Given below is the demand schedule for books per year for a given family. Use this data to answer the following questions.

 Price elasticity of demand Number of books demanded Price per book Total revenue 0 \$20 10 18 20 16 30 14 40 12 50 10 60 8 70 6 80 4 90 2 100 0
1. Compute the coefficient of price elasticity for the price ranges given in the schedule and complete the first column of the table.
2. What do you notice about the algebraic sign of the values you have just computed? Why is this so?
3. Break the demand schedule into the three ranges of the price-elasticity of demand. (You can only approximate the three ranges.)
4. Fill the total revenue (spending) column.
5. How does total spending vary with the price of books in the elastic range? Why?
6. How does total spending vary with the price of books in the inelastic range?
7. Total spending attains a maximum value approximately in which range of price elasticity?
8. Graph the demand curve for books. Explain why the price-elasticity of demand is not equal to the slope of a demand curve.

Interpret the coefficient of the price elasticity that you computed for the seventh price range- \$8 to \$6.

#### Questions Cloud

 Technology improvement is expected in future machines : If the firm needs the service of these machines for an indefinite period also no technology improvement is expected in future machines. Calculating multiple cash flows for a year : Calculating multiple cash flows for a year and determine the amount of each of the annual annuity payment Apple growers launch a very successful advertising campaign : Suppose apples also oranges are substitute. Presume apple growers launch a very successful advertising campaign that convinces consumers apples are a better product. Computing probability values using discrete distribution : What is the probability that a particular driver had exactly two speeding violations? Estimate the price elasticity coefficient : Compute the coefficient of price elasticity for the price ranges given in the schedule and complete the first column of the table. What do you notice about the algebraic sign of the values you have just computed? Why is this so? Conducting experiment for understanding sensation-perception : Reiterate this process of progressively adding the cards over a 15-minute period. Specify if you are able to detect an increasingly dim light longer you spent in dark? Mcdonalds or hilton choose to franchise its local outlets : Why might a parent company like McDonalds or Hilton choose to franchise its local outlets rather than own them also staff them with employees. Japans real every capita output grew : on average, Japan's real every capita output grew at a rate of 3 percent every year among 1973 also 1993. Illustrate what would Japan's output every capita have been at the end of 1993. Calculating probability values : What is the probability of selecting an accounting major, given that the person selected is a male?

### Write a Review

#### Equilibrium output in perfect competition

Suppose the emarginal cost of producing the good in before question is aconstant \$ 10 per unit of output . What quantity of output will the firm produce.

#### Open-economy macroeconomics

Identify trends or other patterns in inflation within the an economy of your choice over the last five years using quarterly data from the Central Bank or other Government based Statistical agency websites as a source.

#### Determining the law of supply

In article on the steel industry, The Wall Street Journal noted that as steel prices were falling, steelmakers were not cutting production

#### Change in price and total expenditure

Discuss how a change in price affects total expenditure by filling in each cell with resulting change in total expenditure.

#### Human service interactions in terms of macro systems

Human service interactions in terms of macro systems-communities and organizations. Empowerment is basically a process to assist people groups, families and communities, individuals, to use their strengths to overcome their challenges.

#### What is bill''s opportunity cost of producing one hat

What is Bill's opportunity cost of producing one hat, In which of the two activities does Mary have a comparative advantage.

#### Airline market-price discrimination

Evaluate: "The fact that some airplanes collide is evidence there is 'too little air traffic control'." (Be sure to explain what too little might mean.)

#### Categorize the utility functions

Suppose Shaqueena is currently earning income of \$23,000 (I =23) and can earn that income next year with certainty.

#### Explain the economic situation in the uae

Explain the economic situation in the UAE based on the article. Summarize the articles with your own words

#### What will be the effect of change in policy

What will be the effect of this change in policy on both the real and the nominal interest rate in the long - run?

#### Cartel behavior and price discrimination strategy

Assume that the soft coal industry is a competitive industry and it is in long run equilibrium. Now assume that the firms in the industry form a cartel.

#### Mcq question on game theory

Which of the following strategies are used by businesses to capture consumer surplus? Nash equilibria are stable because