Suppose that at a price of $400, 300 tickets are demanded to fly from Ithaca, New York, to Los Angeles, California. Now the price rises to $600, and 280 tickets are demanded. Assuming the demand for tickets is linear; find the price elasticities at the quantity- price pairs (300, 400) and (280, 600).
Answer to relevant QuestionsThe monthly market demand curve for calculators among engineering students is given by P = 100 - Q, where P is the price per calculator in dollars and Q is the number of calculators purchased per month. If the price is $30, ...Smith cannot tell the difference between rice and wheat and spends all her food budget of $24/wk on these foodstuffs. If rice costs $3/lb, draw Smith’s price-consumption curve for wheat and the corresponding demand curve.Explain why 1 plus the interest rate in the inter-temporal choice model is analogous to the relative price ratio in the consumer choice model discussed in Chapter 3.Suppose Smith from Problem 7 views current and future consumption as perfect, one-for-one substitutes for one another. Find his optimal consumption bundle.All book buyers have the same preferences, and under current arrangements, those who buy used books at $22 receive the same utility as those who buy new books at $50. The annual interest rate is 10 percent, and there are no ...
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