HW_3_solution_Q1_Q4 - Q4 Change in Quantity= (-3)*(5%)=...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
Q1 (a) Quantity Price 0 20 1 18 2 16 3 14 4 12 5 10 6 8 7 6 8 4 9 2 10 0 The red part of the deamd curve is elastic. The blue part is inelastic. The total revenue increases with price in the inelastic region and increases with price in the elastic region Q2 (a) 0 1 2 3 4 5 6 7 8 9 10 0 5 10 15 20 25 Deamnd Curve Q P 2 4 6 8 10 12 14 16 18 20 Supply Curve
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Quantity Price 1 0 2 2 3 4 4 6 5 8 6 10 7 12 8 14 9 16 10 18 The elsticity will be always smaller than 1. So there is no elastic region. Q3 price elasticity= =percentage changein Q over percentage change in P=(-3%)/(12%)=
Background image of page 2
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 4
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Q4 Change in Quantity= (-3)*(5%)= Chang in Revenue= (1-15%)*(1+5%)-1= 1 2 3 4 5 6 7 8 9 Q Price elasticity Total Revenue negative infinity-9 (You can see the formula in the Formula Bar) 18-4 32-2.33 42-1.5 48-1 50-0.67 48-0.43 42-0.25 32-0.11 18 Price elasticity 0.5 (You can see the formula in the Formula Bar) 0.67 0.75 0.8 0.83 0.86 0.88 0.89 0.9-0.25-15%-0.11 10...
View Full Document

Page1 / 4

HW_3_solution_Q1_Q4 - Q4 Change in Quantity= (-3)*(5%)=...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online