{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Chapter 6 - Chapter 6 Exercises 1.5 Suppose the following...

Info icon This preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 6 Exercises 1.5) Suppose the following the table gives data on the price of rye and the number of bushels of rye sold in 2009 and 2010. Year Price(Dollars per bushel) Quantity (Bushels) 2009 $3.00 8 million 2010 $2.00 12 million a. Calculate the change in the quantity of rye demanded divided by the change in the price of rye. Measure the quantity of rye in bushels . 12,000,000 – 8,000,000/2.00-3.00 = -4,000,000 b. Calculate the change in the quantity of rye demanded divided by the change in the price of rye, but this time measure the quantity of rye in millions of bushels. Compare your answer to the one you computed in a. 12-8/2.00-3.00 =-4 *Much smaller than a. c. Assuming that the demand curve for rye did not shift between 2009 and 2020, use the information in the table to calculate the price elasticity of demand for rye. Use the midpoint formula in your calculation. Compare the value fir the price elasticity of demand to the values you calculated in a and b. 12,000,000-8,000,000/10,000,000 x 100 = 40% Percentage change in price: 2.00-3.00/2.50x100 =-40%
Image of page 1

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

View Full Document Right Arrow Icon
Price elasticity of demand: 40%/-40%=-1 *Way smaller than “a” and little bit larger than “b”.
Image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern