2 8 3
Consider the following weekly supply and demand tables for product X:
P Qd Qs
2 8 3
3 7 4
4 6 5
5 5 6
6 4 7
7 3 8
8 2 9
9 1 10
10 0 11
a. Draw the supply and demand curves on the same diagram. Determine the equilibrium price and quantity numerically and demonstrate graphically.
b. On the same diagram, show the new equilibrium P & Q when Supply and demand has each decreased by 1.
c. On the same diagram relying the original data, demonstrate the impact of the government price controls set at P = 5.
d. Calculate the Elasticity of Demand when Price moves from $7 to $6. Is demand elastic or inelastic in this price range? Why?
e. Recalculate the Price Elasticity of Demand, but this time use the mid-point formula.
f. Create a new numerical column next to the demand for Total Revenue , (TR = P X Q). Redraw the demand curve in one diagram and another diagram RIGHT BELOW the first diagram. Draw the demand curve in the first diagram and the Total Revenue curve in the second diagram. Identify the elastic and inelastic ranges of the demand curve based on its relation with the total revenue changes. Identify the Elastic and Inelastic ranges of the demand curve, based on the demand relationship with Revenue change.
g. Calculate, and also graphically demonstrate the Consumer Surplus, when price is $4.00
h. Suppose a 2o% increase in the Consumer Income has resulted in a 30% decrease n demand for a product. How do you evaluate Income Elasticity of demand? Is the demand for this product income elastic or income inelastic? Is this product a normal good or an inferior good? Demonstrate and explain
Answers: 1
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Companies in the u.s. car rental market vary greatly in terms of the size of the fleet, the number of locations, and annual revenue. in 2011 hertz had 320,000 cars in service and annual revenue of approximately $4.2 billion. the following data show the number of cars in service (1000s) and the annual revenue ($ millions) for six smaller car rental companies (auto rental news website, august 7, 2012). excel file: data14-09.xls if required, enter negative values as negative numbers. a. select a scatter diagram with the number of cars in service as the independent variable. b. what does the scatter diagram developed in part (a) indicate about the relationship between the two variables? c. use the least squares method to develop the estimated regression equation (to 3 decimals). Ε· = + x d. for every additional car placed in service, estimate how much annual revenue will change. by $ e. fox rent a car has 11,000 cars in service. use the estimated regression equation developed in part (c) to predict annual revenue for fox rent a car. round your answer to nearest whole value. $ million hide feedback partially correct
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The following information is for alex corp: product x: revenue $12.00 variable cost $4.50 product y: revenue $44.50 variable cost $9.50 total fixed costs $75,000 what is the breakeven point assuming the sales mix consists of two units of product x and one unit of product y?
Answers: 3
Consider the following weekly supply and demand tables for product X:
P Qd Qs
2 8 3
2 8 3
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