Midpoint method to compute your cost elasticity

Assignment Help Business Economics

Reference no: EM1321407

Q. Assume that your demand schedule for DVD's is as follows:

Cost Quantity Demanded
(Income = 10,000 AED) Quantity Demanded
(Income = 12,000 AED)
8 AED 40 DVD's 50 DVD's
10 AED 32 45
12 AED 24 30
14 AED 16 20
16 AED 8 12

a. Use the midpoint method to Compute your cost elasticity of demand as the cost of DVD's increases from 8 AED to 10 AED if

(1) your income is 10,000 AED and

(2) your income is 12,000 AED.

b. Compute your income elasticity of demand as your income rises from 10,000 AED to 12,000 AED if

(1) The cost is 12 AED and

(2) The cost is 16 AED.

Reference no: EM1321407

Questions Cloud

Computing odds of flipping three tails : A fair coin is flipped 3 times. Compute the odds of flipping 3 tails.

What is the equilibrium cost of a car stereo : Illustrate what is the equilibrium cost of a car stereo also illustrate what is the equilibrium quantity of car stereos per day.

Show how to find equilibrium in an rc model : Show how to find equilibrium in an RC model? What is the relationship between the marginal rate of substitution between leisure and labor and the marginal product of labor in the RC model.

Find the regression coefficients : Find the regression coefficients.

Midpoint method to compute your cost elasticity : Use the midpoint method to Compute your cost elasticity of demand as the cost of DVD's

Computing third quartile of the exam scores : Consider following data on exam scores of 10 randomly selected students: Compute 3rd quartile of the exam scores.

Find article which discusses security issues : Find an article that discusses security issues and how they affect carrier cost weather this is by air, ground or sea. In the first sentence of this review be sure to identify clearly this issue that's being addressed.

What is the yrly equivalent expense : Illustrate what is the present equivalent of the overhaul expenses at time 0. Illustrate what is the yrly equivalent expense during only yrs 5-13.

Computing slope of an ols regression line : Compute b1, slope of an OLS regression line using dollars spent as dependent variable (Y) and age as independent variable (X).

User Account

All Pages