Consider the following.Demand Function162+2elasticP=Find the price elasticity of demand for the demand function at the indicated x-value.InelasticQuantity DemandedX= 7Is the demand elastic, inelastic, or of unit elasticity at the indicated x-value?The demand is elastic at this x-value.O The demand is inelastic at this x-value.O The demand is of unit elasticity at this x-value.Use a graphing utility to graph the revenue function. Identify the intervals of elasticity and inelasticity. (Enter your answer using interval notation.)

Price elasticity of demand is a measure of how sensitive the quantity demanded of a good or service…

Find the price elasticity of demand for the demand function at the indicated x-value. Is the demand elastic, inelastic, or of unit elasticity at the indicated x-value? O The demand is elastic at this x-value. The demand is inelastic at this x-value. O The demand is of unit elasticity at this x-value. Use a graphing utility to graph the revenue function. Identify the intervals of elasticity and inelasticity. (Enter your answer using interval notation elastic Inelastic

Find the price elasticity of demand for the demand function at the indicated x-value. Is the demand elastic, inelastic, or of unit elasticity at the indicated x-value? O The demand is elastic at this x-value. The demand is inelastic at this x-value. O The demand is of unit elasticity at this x-value. Use a graphing utility to graph the revenue function. Identify the intervals of elasticity and inelasticity. (Enter your answer using interval notation elastic Inelastic

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter5: Elasticity Of Demand And Supply

Section: Chapter Questions

Problem 1.1P: (Calculating Price Elasticity of Demand) Suppose that 50 units of a good are demanded at a price of...

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(Calculating Price Elasticity of Demand) Suppose that 50 units of a good are demanded at a price of Si per unit. A reduction in price to $0.20 results in an increase in quantity demanded to 70 units. Using the midpoint formula, show that these data yield a price elasticity of 0.25. By what percentage would a 10 percent rise in the price reduce the quantity demanded, assuming price elasticity remains constant along the demand curve?
The Stopdecay Company sells an electric toothbrush for $25. Its sales have averaged 8,000 units per month over the past year. Recently, its closest competitor, Decayfigh ter, reduced the price of its electric toothbrush from $35 to $30. As a result, Stopde cays sales declined by 1,500 units per month. What is the arc cross elasticity of demand between Stopdecays toothbrush and Decayfighters toothbrush? What does this indicate about the relationship between the two products? If Stopdecay knows that the arc price elasticity of demand for its toothbrush is 1.5, what price would Stopdecay have to charge to sell the same number of units as it did before the Decayfighter price cut? Assume that Decayfighter holds the price of its toothbrush constant at $30. What is Stopdecays average monthly total revenue from the sale of electric toothbrushes before and after the price change determined in part (b)? Is the result in part (c) necessarily desirable? What other factors would have to be taken into consideration?
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