BU224_WillisJill_ Unit 5 assignment

BU224_WillisJill_ Unit 5 assignment - Unit 5 Assignment...

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Unit 5 Assignment Template: Name: - Jill Willis Course Number: - BU224 Section Number: - Unit Number: - 5 Date: - April 5, 2016 ---------------------------------- General Instructions for all Assignments ----------------------------------- 1. Unless specified differently by your course instructor, save this assignment template to your computer with the following file naming format: Course number_section number_LAST_FIRST_ unit number 2. At the top of the template, insert the appropriate information: Your Name, Course Number, Section Number and Date 3. Insert your answers below, or in the appropriate space provided for in the question. Your answers should follow the APA format with citations to your sources and, at the bottom of your last page, a list of references. Your answers should also be in Standard English with correct spelling, punctuation, grammar, and style (double spaced, in Times New Roman, 12-point, black font). Respond to questions in a thorough manner, providing specific examples of concepts, topics, definitions, and other elements asked for in the questions. 4. Provide a list of references at the end of the last page of your assignment. 5. Upload the completed assignment to the appropriate dropbox. 6. Any questions about the assignment, or format questions, should be directed to your course instructor. ------------------------------------------- Career Competencies ----------------------------------------- In this assignment, you will engage in developing the following career competencies: Analyzing Quantitative Data Analyzing Qualitative Data ------------------------------------------- Assignment ------------------------------------------- 1. The accompanying table shows the price and yearly quantity sold of ice cream cones on Sidfield Island. Page 1 of 6 Price of Ice Cream Cones Quantity of Ice Cream Cones Demanded $1 3000 $2 2400 $3 1600 $4 800
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a. Using the midpoint method (show your work), calculate the price elasticity of demand when the price of an ice cream cone rises from $1 to $2. What does this estimate imply about the price elasticity of demand for ice cream cones? The midpoint elasticity formula is [(Q2 - Q1)/ ((Q2 + Q1)/2)] / [(P2 - P1) / ((P2 + P1)/2)] Q is quantity demanded and P is price-1 is the old price or quantity, 2 is the final price [(2400-3000) / ((2400+3000)/2) ]/ [(2-1)/(2+1)/2)] [(-600) / (5400/2)]/ [(1/ (3/2)] [(-600)/ (2700)] / (1/1.5) = -0.222/0.666 = -0.333 This estimate shows the demand price is relatively inelastic.
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