compute the following price elasticities of demand, Microeconomics

Assignment Help:
#• The price of a laptop increases by 20% and there is a 40% drop in the quantity demanded.
• The price of a pack of cigarettes increases by 10% and there is a 5% drop in the quantity demanded.
Of the above examples, which are more elastic, and which is the least elastic? Why? Answer the following questions:
• Why is elasticity an important concept for a business?
o Bridge tolls
o Beachfront properties
o Gourmet coffee
o Gasoline
o Cell phones
Now that you are an expert on elasticity’s, what do you think would be the best time of year to raise prices, and why?
What do you think the elasticity’s are in the flower business?

Related Discussions:- compute the following price elasticities of demand

Price of lending money, Interest: A lender charges interest as the price of...

Interest: A lender charges interest as the price of lending money (or some other asset) to a borrower. Interest is mainly charged as a specified percentage of the loan's value, per

Atmospheric Pollution, Earth is completely surrounded by thick envelope of ...

Earth is completely surrounded by thick envelope of gases called atmosphere. Atmosphere is sub divided into different layers depending upon the distance from the sea level. The

Economics, Ask questiowhat are the importance of the branches of economics

Ask questiowhat are the importance of the branches of economics

Monopoly, if the inverse demand curve is p=120-Qand the marginal cost is co...

if the inverse demand curve is p=120-Qand the marginal cost is constant at 10, how does charging the monopoly a specific tax of 10 per unit affect the monopoly optimum and the welf

Perfect competition in neoclassical economics, Q. Perfect Competition in ne...

Q. Perfect Competition in neoclassical economics? Perfect Competition: An abstract assumption, central to neoclassical economics, in that companies are so small that none can i

Insurance, Sita expects her future earnings to be worth Rs 100. If she fall...

Sita expects her future earnings to be worth Rs 100. If she falls ill, her expected future earning will be Rs 25, There is a belief that she may fall ill 2 with probability of -3

Steps of the basic analytical framework in modern economics, What are the s...

What are the steps of the basic analytical framework in Modern Economics? Framework is very significant to master this fundamental analytical framework, particularly, these fiv

Risk neutral persons, Risk Neutral - A person is a risk neutral if they...

Risk Neutral - A person is a risk neutral if they show no preference between certain, and an uncertain income with the same expected value.

Compute the point price elasticity of demand, Suppose that the price of sch...

Suppose that the price of schooling is $20 per year of schooling and it suddenly rises to $40. Compute the point price elasticity of demand at the initial price level and at the fi

Rational producer, would a rational producer be concerned with the average ...

would a rational producer be concerned with the average or marginal product of an input in deciding whether or not to hire the inputs?

Write Your Message!

Captcha
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