Question: Given the demand equation: P=Q100 + 150 a) (i) Define price elasticity of demand. (ii) Given the equation above, find the price elasticity of

Given the demand equation: P=Q100 + 150 a) (i) Define price elasticity

Given the demand equation: P=Q100 + 150 a) (i) Define price elasticity of demand. (ii) Given the equation above, find the price elasticity of demand when Q=4. d) (iii) Given the price elasticity of demand in (ii), estimate the percentage change in price needed to increase quantity demanded by 10% and interpret your answer. (3 marks) b) If the demand for petrol is price inelastic, what effect will an increase in price of petrol have on total revenue petrol producers? Discuss using a diagram. (6 marks) c) Given the demand function Q = 500 - 3P-2PA + 0.01Y (3 marks) (4 marks) Where P = 20, PA = 30 and Y = 5000, find: Note: P is the price of the good, PA is the price of an alternative (related) good, Y is income 1. The price elasticity of demand (2 marks) ii. The cross-price elasticity of demand (2 marks) (2 marks) Income elasticity of demand iv. If incomes rise by 5%, calculate the corresponding percentage change in demand. Is this good an inferior, a normal or a superior/luxury good? (2 marks) Using examples, discuss 4 factors that influence the price elasticity of demand. (16 marks)

Step by Step Solution

★★★★★

3.43 Rating (159 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

PQ10Q150 Ai Price Elasticity of demand is the Percentage change in quantity demanded due to Percenta... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!

On Newton: Create two sub interfaces, for VLANs 10 and 20. - Enable dot1q trunking for each sub interface. (1 mark) Using VLSM, split 172.16.0.0/24 into (see above selection method) further...

Accounting Complete the table from the worksheet using the prices given in Q 8 and Q 11 of the Pilot quiz: Pizza Slices Bottle of Soda P 1/4 points Question 9 (a) Given the prices and your worksheet...

Bilal Goldsmith broker has shown him two bonds . Each has a maturity of 5 years , a par value of BD 1,000and a yield to maturity of 14 % . Bond A has a coupon. interest rate of 8 % paid annually Bond...

The last four months of sales were 8, 10, 15, and 9 units. The last four forecasts were 5, 6, 11, and 10 units. The Mean Absolute Deviation (MAD) is:

You ran a regression of the yield of KC Companys 10- year bond on the 10- year U. S. Treasury benchmarks yield using month- end data for the past year. You found the following result: YieldKC = .54 +...

Draw the price effect and the quantity effect for a price change from $10 to $20. Which effect is larger? Does total revenue increase or decrease? No calculation is necessary.

Use the wave equation to find the speed of a wave given by y(x, t) = (3.00mm) sin [(4.00 m1)x (7.00 s1)t].

The Stopdecay Company sells an electric toothbrush for $25. Its sales have averaged 8,000 units per month over the past year. Recently, its closest competitor, Decayfighter, reduced the price of its...

In the network in Fig P6.5, find i0(t) for t>0 using the differential equation approach. t-0 t(t) 2A 2H 12 4

Estimate the change in the Gibbs energy of 1.0 dm3 of water when the pressure acting on it is increased from 100 kPa to 300 kPa.

Define price elasticity of demand and explain what ranges of value it may take.

Bellevue Power Co. reported its capital structure as follows: - Debt: 5,000 shares outstanding with 7 percent coupon rate, 20 years to maturity, $1,000 par value, selling for 92 percent of par....

The following information pertains to JAE Corp. at January 1, 2016: Common stock, $10 par, 20,000 shares authorized, 2,000 shares issued and outstanding .......$20,000 Paid-in capital in excess of...

Evaluate the definite integral. 3 0 ( 8 cos ( t ) i + sin ( t ) j + 9 k ) dt

On September 1, Scott Company established a petty cash fund with $300 cash. A physical count of the petty cash fund on September 30 disclosed $49 in currency and coins. The petty cash vouchers are...

how can we use/compare using this formula d = a sin t ? A point P in simple harmonic motion has a frequency of oscillation o per minute and amplitude of 4 ft. Express the motion of P by means of an...

List and label the different types of variables at following case: explain and illustrate by diagrams the relationships among the variables : A manager finds that offthejob classroom training has a...

Consider the following scenario: You are designing a research study to determine the effects of a new medication to treat bipolar disorder in children. Would you choose to conduct a correlation study...

An object of mass m-4 kg sliding on a horizontal frictionless surface is attached to one end of a horizontal spring of spring constant k=2000 N/m which has its other end fixed. If the speed of the...

In your own words, in a detailed two-paragraph, provide in the context of a change consultant, the diagnosis of the current situation regarding the case scenario "Change Agent in Waiting" involving...

1) If the demand equation for a given period is Qdx = 50 - Px , compute the quantity demanded for x if the price of x is 10 pesos and 15 pesos, the Qdx is in terms of kg. Note: #1 to #6 are...

Description Submit on Tuesday (December 6, 2022 during the class) No late assignments will be accepted.) Assume that the country has entered into international trading where Price of the exportation...

1. You are given the following demand equations: Q 450 16P Q 360 80P Q 1,500 500P a. Determine each equations total revenue and marginal revenue equations. b. Plot the demand equation and the...

1. Which of the following is considered an implicit cost? A. Use of your labor services in manning your business without paying yourself B. Converting your existing warehouse to a store without...

Need Help with Questions E,F,G,H,I,&J Description After coming up with an innovative idea for a new product, you paid $2000 to an industrial designer to draw the blueprints and found a factory in...

1. Compute the area enclosed by the line y = 2 4 x + 2 7 and by the curve y=16x^2 using integration with respect to x. 2. Find the daily consumer surplus if the demand equation is given by p = 0 . 2...