Explain why the price elasticity of demand is negative

Assignment Help Business Economics
Reference no: EM131101304

Explain why the price elasticity of demand is negative. What would the price elasticity of demand be for a “prestige good”, one for which quantity purchased increases as price increases? How do you reconcile these two statements?

Reference no: EM131101304

Questions Cloud

Decides to focus more on reducing income inequality : Consider the market for labor is segmented into the market for low skilled labor and the market for high skilled labor. If the low skilled labor market is given by the following function: labor demand: w = 35 – 0.005L; and labor supply is 4000. What ..
Higher prices or higher utilization or a combination of two : Consider the following aggregate economic data regarding all the health care goods and services in a given country: Tylenol X-ray Physical therapy Year Price Aggregate expenditures. For each of these three health care goods and services, is the incre..
Discuss the risks of introducing market mechanisms of supply : Describe how free market features could be introduced to help alleviate the social problem through free market operations of supply and demand. Discuss the risks of introducing market mechanisms of supply and demand in situations where.
Explain why the price elasticity of demand is negative : Explain why the price elasticity of demand is negative. What would the price elasticity of demand be for a “prestige good”, one for which quantity purchased increases as price increases? How do you reconcile these two statements?
Example of market that is monopolistically competitive : In many urban areas, the fast food industry is a common example of a market that is monopolistically competitive. Are there any barriers to entry for potential firms that might wish to enter the fast food industry? Also, what are the prospects for a ..
Why is the aggregate demand curve downward sloping : List and explain two factors that will cause the AD to shift to the left. Why is the aggregate demand (AD) curve downward sloping? Discuss and use graphs where necessary?
Produce steel tubing requires an initial investment : A new plant to produce steel tubing requires an initial investment of $10 million. It is expected an additional investment of $ 5 million in year 3 and an investment of $ 3 million in year 6. Annual operating cost will be $ 3 million. The Annual reve..
Explain the effect devaluation has on price of imports : Explain the concept of devaluation, and explain the effect devaluation has on the price of a country's imports. What some effects on the industry? Buying and selling countries? Give an example that supports your claims.

Reviews

Write a Review

Business Economics Questions & Answers

  Every fiscal decision involves opportunity costs

The United States has accrued a public debt of over $19 trillion over the course of its history, which is equivalent to slightly more than the annual nominal GDP of the nation. Come up with and explain at least two ideas in terms of how to reduce the..

  How do you explain economies of large-scale production

Which is more economical, a plant with a payroll of $400 a week, with $100 of overhead, and with an output of 100 units per week, or a plant with a payroll of $80,000 a week, an overhead of $100,000 a week, and an output of 50,000 units per week? How..

  Accordance with the law of comparative advantage

Joint output of individuals or nations will be maximized when goods are exchanged between parties in accordance with the law of "comparative advantage". An increase in consumer income will affect the supply of any given product. The production possib..

  Suppose that a monopolist faces the demand curve

Suppose that a monopolist faces the demand curve: Q=a-bP, where a and b are constants. Show that his marginal revenue curve is given approximately by the equation: MR= a - 2Q/b

  Q1 why do economists attempting to forecast short run

q1. why do economists attempting to forecast short run future changes in real gdp and employment look closely at data

  Developments of the major economic security programs

Describe the historical and institutional developments of the major US economic security programs since the early 20th century and identify the major attempts to reform the system throughout the period.

  What is the market-clearing wage with open borders

Assume that labor demand for low-skilled workers in the United States is: w = 24 – 0.1E where E is the number of workers (in millions) and w is the hourly wage. Assume there are currently 120 million domestic U.S. low-skilled workers who supply labor..

  Calculate the maximum rental value of the land

On a specific plot of land, X = 20L1/2 ; where X is the level of output in bushels of wheat, and L is the number of workers hired. Assuming that each worker receives a real wage equal to 1 bushel of wheat, calculate the maximum rental value of the la..

  Others are gasoline and diesel consumption per capita

The USA Federal Government has decided to embark on Energy Security for the Nation in order to secure future availability of energy for the country. USA is rich in oil and gas resources, but the goal is for the country to be less energy dependent. Th..

  Arguments strengthen the idea of floating exchange rates

Which of the following arguments strengthen the idea of floating exchange rates? A. Trade deficits can be corrected through changes in exchange rates. B. Changes in exchange rates will not impact the trade balance in the country. C. Governments shoul..

  What is wilson reorder point

Wilson Company sells 130 units daily. Each time Wilson orders more units, the supplier takes four days to deliver the inventory. What is Wilson's reorder point (in number of units)?

  Marginal-cost curve lies below the marginal-revenue curve

When the marginal-cost curve lies below the marginal-revenue curve. Assume that for a perfectly competitive firm marginal revenue equals rising marginal cost at 100 units of output. At this output level, the firm's total fixed cost is $600 and its to..

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