106 hw1 - Economics 106 Managerial Economics Assignment 1...

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Economics 106 Managerial Economics Assignment 1 Fall 2010 Due date: Fri, Nov 12 at the beginning of class. Follow the homework guidelines as posted on the webpage (see http://econ.ucsb.edu/~benelli/homework_guidelines.htm). Round all answers to 2 decimals. 1. A firm has estimated the following inverse demand function. P = -0.1Q + 14 or graphically, at $4, Q=100 at $6, Q=80 a. Using percent changes, calculate the elasticity from A to B. b. Using percent changes, calculate the elasticity from B to A. c. Using the arc price, calculate the elasticity from A to B. d. Using the arc price, calculate the elasticity from B to A. e. Using price point elasticity, calculate the elasticity at A. f. Using price point elasticity, calculate the elasticity at B. $6 $4 P 80 100 A B Q 1
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2. A firm has estimated the following demand function. Q x = -0.1Px 2 + 14Py + I Let P y = 1 and I=60 a. Using percent changes, calculate the elasticity from $15 to $18. b. Using percent changes, calculate the elasticity from $18 to $15.
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106 hw1 - Economics 106 Managerial Economics Assignment 1...

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