1)At a price of $10, quantity demanded is 30 units while at a price of $11, quan
ID: 1098360 • Letter: 1
Question
1)At a price of $10, quantity demanded is 30 units while at a price of $11, quantity demanded is 24 units. What is the price elasticity of demand?A) 0.5 B) 0.43 C) 2.33 D) 6.0
Please Explain why the answer is C, with the calculation explanations.
2)
A firm believes it can increase its profits if it increases its revenues. If the price elasticity of demand is 0.88, the firm should
A) increase its price. B) decrease its price. C) change p rice by 88 percent. D) leave price unchanged.
Please Explain why the answer is A.
Other things equal, demand is more elastic the
A) less expensive the good. B) shorter the time period for adjustment. C) larger the percentage of a total budget that a family spends on the good. D) more unique the good is.
The answer is C, please explain why
1)At a price of $10, quantity demanded is 30 units while at a price of $11, quantity demanded is 24 units. What is the price elasticity of demand?
A) 0.5 B) 0.43 C) 2.33 D) 6.0
Please Explain why the answer is C, with the calculation explanations.
2)
A firm believes it can increase its profits if it increases its revenues. If the price elasticity of demand is 0.88, the firm should
A) increase its price. B) decrease its price. C) change p rice by 88 percent. D) leave price unchanged.
Please Explain why the answer is A.
Other things equal, demand is more elastic the
A) less expensive the good. B) shorter the time period for adjustment. C) larger the percentage of a total budget that a family spends on the good. D) more unique the good is.
The answer is C, please explain why
A) 0.5 B) 0.43 C) 2.33 D) 6.0
Please Explain why the answer is C, with the calculation explanations.
2)
A firm believes it can increase its profits if it increases its revenues. If the price elasticity of demand is 0.88, the firm should
A) increase its price. B) decrease its price. C) change p rice by 88 percent. D) leave price unchanged.
Please Explain why the answer is A.
Other things equal, demand is more elastic the
A) less expensive the good. B) shorter the time period for adjustment. C) larger the percentage of a total budget that a family spends on the good. D) more unique the good is.
The answer is C, please explain why
A firm believes it can increase its profits if it increases its revenues. If the price elasticity of demand is 0.88, the firm should
A) increase its price. B) decrease its price. C) change p rice by 88 percent. D) leave price unchanged.
Please Explain why the answer is A.
Other things equal, demand is more elastic the
A) less expensive the good. B) shorter the time period for adjustment. C) larger the percentage of a total budget that a family spends on the good. D) more unique the good is.
The answer is C, please explain why
Other things equal, demand is more elastic the
A) less expensive the good. B) shorter the time period for adjustment. C) larger the percentage of a total budget that a family spends on the good. D) more unique the good is.
Explanation / Answer
1) relative change in quantity by relative change in prive
(6/30)/(1/11) = 2.33
2)If the price elasticity of demand for a given product is inelastic, then a price increase will also increase total revenue. Therefore, the executive is saying that a price increase will increase total revenue.
3)
C) larger the percentage of a total budget that a family spends on the good.
because when demand is more elastic prices of the goods increases and your income remains same so that lager amount of your income will spent on goods
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