handout-2 - Explain in detail. (Show all your work and give...

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Handout 2: Market Analysis The table below gives the individual demands’ of Lisa and Chuck for movies: Quantity of movies demanded / mo. Price / movie Lisa Chuck $7 1 0 6 2 0 5 3 0 4 4 1 3 5 2 2 6 3 a) Calculate the market demand for movies assuming that only Lisa and Chuck have individual demands for movies. Explain this market demand. b) Graph the market demand for movies found in (a). Does this market demand follow the “law of demand.”? Explain and offer reasons for this law. c) Calculate the price elasticity of demand for movies given your market demand in (a) for each price change. Is demand elastic, unit elastic, inelastic?
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Unformatted text preview: Explain in detail. (Show all your work and give the complete elasticity formula). d) Now, assume that 7 movies are offered per month. (1) Determine the market price for each movie. Explain your reasoning. (2) If Chucks demand for movies increases, as shown below, calculate the new market price for movies if 7 movies are offered per month. Quantity of movies demanded/mo Price / movie Chuck $7 6 5 1 4 3 3 4 2 6 What factor or factors could have increased Chucks demand for movies?...
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