What is the income elasticity of demand for mobile service

Assignment Help Microeconomics
Reference no: EM131575975

Problem - Consider the markets for mobile and landline telephone service. Suppose that when the average income of residents of Plainville is $55,000 per year, the quantity demanded of landline telephone service is 12,500 and the quantity demanded of mobile service is 28,000. Suppose that when the price of mobile service falls from $120 to $100 per month, the quantity demanded of landline service decreases to 11,000. Suppose also that when the average income increases to $60,000, the quantity demanded of mobile service increases to 33,000.

Using the midpoint method, what is the income elasticity of demand for mobile service? Considering the income elasticity, what type of good is mobile telephone service?

Using the midpoint method, what is the cross price elasticity of demand for landline and mobile service?  Considering the cross price elasticity of demand for mobile and landline telephone service, is the cross price elasticity of demand positive or negative and do the consumers of Plainville regard these goods as substitutes or complements?

Reference no: EM131575975

Questions Cloud

Examine the tax legal and ethical issues in the case : Examine the tax, legal, and ethical issues in the case, and comment on the manner in which the case was handled by the organization and by regulatory authority.
Why did you find the case interesting : Why did you find the case interesting? Did the case seem fair, reasonable and serve the interests of the consumer
Build the linear programming model : The Donna Mosier Clothing Group owns factories in three towns (W, Y, and Z), which distribute to three retail dress shops in three other cities (A, B, and C).
Largest chain of coffee shops : Starbucks, the world's largest chain of coffee shops is very proud of its mission statement which includes "treating people with dignity and respect,"
What is the income elasticity of demand for mobile service : Using the midpoint method, what is the cross price elasticity of demand for landline and mobile service
Battling over bottled water : lease-holders are generally understood to be able to make full use of their land
Discuss about community services and resources : Outline how you would make this information available to families and assist them to locate, contact and/or access community services and resources as required.
Preventing future mass shootings through gun control : For this assignment I will need an argumentative research paper. Topics you may pick from (you may argue either side of the debate):The Cost of College Text
Write a management report to the bank : Write a management report to the Bank of Al Ain's senior Management outlining the Activity Based Costing model that you developed for the Bank

Reviews

Write a Review

Microeconomics Questions & Answers

  The free rider problem

Question: Explain why the free rider problem makes it difficult for perfectly competitive markets to provide the Pareto efficient level of a public good.

  Failure of the super committee is good thing for economy

Some commentators have argued that the failure of the “Super committee” is good thing for the economy?  Do you agree?

  Case study analysis about optimum resource allocation

Case study analysis about optimum resource allocation: -  Why might you suspect (even without evidence) that the economy might not be able to produce all the schools and clinics the Ministers want? What constraints are there on an economy's productio..

  Fixed cost and vairiable cost

Questions:  :   Which of the following are likely to be fixed costs and which variable costs for a chocolate factory over the course of a month?  Explain your choice.

  Problem - total cost, average cost, marginal cost

Problem - Total Cost, Average Cost, Marginal Cost: -  Complete the following table of costs for a firm.  (Note: enter the figures in the  MC   column  between  outputs of  0 and 1, 1 and 2, 2 and 3, etc.)

  Oligopoly and demand curve problem

Problem based on Oligopoly and demand curve,  Draw and explain the demand curve facing each firm, and given this demand curve, does this mean that firms in the jeans industry do or do not compete against one another?

  Impact of external costs on resource allocation

Explain the impact of external costs and external benefits on resource allocation;  Why are public goods not produced in sufficient quantities by private markets?  Which of the following are examples of public goods (or services)? Delete the incorrec..

  Shifts in demand and movements along the demand curve

Describe the differences between shifts in demand and movements along the demand curve. What are the main factors which can shift the demand curve? Explain why they cause the demand curve to shift. Use examples and draw graphs to support your discuss..

  Article review question

Article Review Question: Read the following excerpts from the article "Fruit, veg costs surge' by Todd, Dagwell, published in the Herald on January 25th 2011 and answer questions below:

  Long-term growth, international trade & globalization

Long-term Growth, International Trade & Globalization:- This question deals with concepts such as long-term growth, international trade and globalization. Questions related to trade deficit, trade surplus, gains from trade, an international trade sce..

  European monetary union (emu) in crisis

"Does the economic bailout of Spain and Greece spell the beginning of the end for the European Monetary Union (EMU)?"

  Development game “settlers of catan”

Read the rules of the game, the overview and the almanac for the Development Game "Settlers of Catan"

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