1. Epson’s office printer price increased from $97 to $150. At the same time the
ID: 1134897 • Letter: 1
Question
1.
Epson’s office printer price increased from $97 to $150. At the same time the quantity demanded for printer ink decreased from 260 to 160. Calculate the cross price elasticity of demand using the midpoint method. Are these products complements or substitutes?
2. Kel loves orange soda. Unfortunately, the price has increased from $2 to $4. The percentage change in price is
3. Suppose the price for an Uber ride in Austin, TX decreases from $15 to $12 causing the quantity of rides demanded to increase from 1000 to 1600. Using the midpoint method, the price elasticity of demand for an Uber ride is ________.
The cross-price elasticity of demand is .90 and they are compliments.Explanation / Answer
Ans1) elasticity= (97+150)/(260+160)×(-100/53)
=(247/420)×(-1.88) =-1.11
c =(The cross-price elasticity of demand is -1.11 and they are compliments)
Ans2)
percentage change in price is = ((4-2)/2)×100
=100%
A increase of 100%
In given options , there is no correct answer .
Ans3) elasticity=(15+12)/(1000+1600)×(-600/3)
=(27/2600)×(-200) =-2.07
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