Essay
1.What is damage elasticity of crave? Describe the three ranges of elasticity and their relationship to marginal revenue.
Problems
2.Given appropriate information, calculate the sheer monetary value, income, and cross-price elasticities of collect and identify.
3.Given appropriate information, calculate the point price, income, and cross-price elasticities of demand and identify.
hurt Elasticity of Demand
When a firm is thinking near setting its price, the responsiveness of measuring demanded to price is very important. The practice of law of demand states that if the relative price of a heavy rises, the sum of money demanded falls. But by how much? If the amount buyers are commensurate and willing to buy is very responsive to changes in the erects price, then buyers will purchase much less. If it isnt very responsive, then they will buy about the identical amountâ€"only a little bit less.
The consideration used in economics to refer to this responsiveness is elasticity.
Price elasticity of demand is the percent change in quantity demanded divided by the percent change in the goods price.
There are cardinal measures of elasticity.
Arc price elasticity of demand Ep= Q2 Q1/P2 P1 * P2+P1/Q2+Q1
Point Price elasticity of demand Ep = first derivative of the demand function * P/Q
Qd=65060-20P
derivative = -20
point price elasticity of demand function = -20P/Q
envisage the price is 2753.
Using the demand function, quantity is 10,000. The point price elasticity of demand is:
Ep = -20 * P/Q
= -20 * 2753/10,000
= -5.51
If you are given two prices and the associated quantities demanded, then the arc elasticity of demand can be calculated:
P Qd
500 249,500
550248,500
Ep = (249,500 248,500)/(500-550) * (500+550)/(249500+248500)
= 1000/-50 * 1050/498,000
= -20 * .002108
= -.04217
If you are meet given two prices and a demand function, arc...If you want to push a full essay, order it on our website: Orderessay
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