HW_3_solution_Q1_Q4

# HW_3_solution_Q1_Q4 - Q4 Change in Quantity=-3(5)= Chang in...

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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

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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%)=

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

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