ECON 5705 Ch 3 Exercises Brendan O’Neal

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Brendan O’Neal ECON 5705 Chapter 3 Exercises 1-5 Chapter 3 Demand Analysis 1. Ex = (4500-6000)/(4500+6000)/(450-600)/(450+600) = 1 b. Yes, a decrease in price would lead to a decrease in sales by Potomac. There are several other factors that could influence the relationship. These could include a recession or other seasonal influences. c. P2 = $455
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Unformatted text preview: 2. E = q/20 = -2.2 q = 44% 3. ED = (1800-1500)/(1800+1500)/(1.75 – 2.25)/(1.75+2.25) = -.727 4. a. -.3 b. Ridership would not likely return to its previous levels because other alternatives would be looked at and invested in or the ridership would have found other alternatives. 5. Forecast demand = +/- 11 million...
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