1. Use the total revenue test to determine whether the demand for home heating oil is elastic or inelastic.

2. If the price of a wool sweater did not change, calculate the cross elasticity of demand for wool sweaters with respect to the price of home heating oil. Are home heating oil and wool sweaters substitutes or complements? Why?

3. The figure shows the demand for movie tickets. Is the demand for movie tickets elastic or inelastic over the price range $7 to $9 a ticket? If the price falls from $9 to $7 a ticket, explain how the total revenue from the sale of movie tickets will change. Calculate the price elasticity of demand for movie tickets when the price is $8 a ticket.

 

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FIGURE 5.1 Chapter Checkpoint Study Plan Problem 3 Price (dollars per ticket) 10 8. 100 200 300 Quantity (tickets per day) FIGURE 5.1 Chapter Checkpoint Study Plan Problem 3 Price (dollars per ticket) 10 8. 100 200 300 Quantity (tickets per day)

Answer rating: 100% (QA)

Answer to the question no 1 and 2 Using the following formula we can find the price elasticity of de... View the full answer