# Question

The demand curve for a product is given by where Pz = $ 300.

a. What is the own price elasticity of demand when Px = $ 140? Is demand elastic or inelastic at this price? What would happen to the firm’s revenue if it decided to charge a price below $ 140?

b. What is the own price elasticity of demand when Px = $ 240? Is demand elastic or inelastic at this price? What would happen to the firm’s revenue if it decided to charge a price above $ 240?

c. What is the cross- price elasticity of demand between good X and good Z when Px = $ 140? Are goods X and Z substitutes or complements?

a. What is the own price elasticity of demand when Px = $ 140? Is demand elastic or inelastic at this price? What would happen to the firm’s revenue if it decided to charge a price below $ 140?

b. What is the own price elasticity of demand when Px = $ 240? Is demand elastic or inelastic at this price? What would happen to the firm’s revenue if it decided to charge a price above $ 240?

c. What is the cross- price elasticity of demand between good X and good Z when Px = $ 140? Are goods X and Z substitutes or complements?

## Answer to relevant Questions

Suppose the demand function for a firm’s product is given byln Qdx = 7 1.5 ln Px + 2 ln Py - 0.5 ln M + ln AWhere Px = $ 15, Py = $ 6, M = $ 40,000, and A = $ 350. a. Determine the own price elasticity of demand, and state ...The demand function for good X is Qdx = a + bPx + cM + e, where Px is the price of good X and M is income. Least squares regression reveals that â = 8.27, bˆ = -2.14, cˆ = 0.36, δa = 5.32, δbˆ = 0.41, and δcˆ = 0.22. ...A consumer’s budget set for two goods (X and Y) is ≥ 600 3X + 6Y. a. Illustrate the budget set in a diagram. b. Does the budget set change if the prices of both goods double and the consumer’s income also doubles? ...A firm can manufacture a product according to the production functionQ = F (K, L) = K3/ 4 L1/ 4a. Calculate the average product of labor, APL, when the level of capital is fixed at 81 units and the firm uses 16 units of ...According to The Wall Street Journal, Mitsubishi Motors recently announced a major restructuring plan in an attempt to reverse declining global sales. Sup-pose that as part of the restructuring plan Mitsubishi conducts an ...Post your question

0