Microeconomics
2nd Edition
ISBN: 9780073375854
Author: B. Douglas Bernheim, Michael Whinston
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Question
Chapter 2, Problem 2CP
To determine
Elasticity of demand.
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Suppose at the current price, the price elasticity of demand for a firm's product is ε = -1/2. Which of the following is true:
A 2% change in the price would be expected to impact quantity demanded by 1%
If the price of the product increases, quantity demanded will fall
If the firm raises it's price, revenues will increase.
All of the above
The demand curve for original Iguanawoman comics is given by
q = (403-p)^2/100 (0 ≤ p ≤ 403),
where q is the number of copies the publisher can sell per week if it sets the price at $p.
(a)
Find the price elasticity of demand when the price is set at $39 per copy. (Round your answer to two decimal places.)
(b)
Find the price at which the publisher should sell the books to maximize weekly revenue. (Round your answer to the nearest cent.)
$
(c)
What, to the nearest $1, is the maximum weekly revenue the publisher can realize from sales of Iguanawoman comics?
$
The weekly sales of Honolulu Red Oranges is given by
q = 1026 - 19p.
where q is the number of oranges sold at the price p dollars per orange. Find E(p)
E(p) =
Calculate the price elasticity of demand when the price is $36 per orange (yes, $36 per oranget). HINT [See Example 1.]
Interpret your answer.
The demand is going down v
by
x % per 1% increase in price at that price level.
Use the elasticity to calculate the price that gives a maximum weekly revenue.
x dollars per orange
Find this maximum revenue.
x dollars of revenue
Chapter 2 Solutions
Microeconomics
Ch. 2 - Prob. 1DQCh. 2 - Prob. 2DQCh. 2 - Prob. 3DQCh. 2 - Prob. 4DQCh. 2 - Prob. 1PCh. 2 - Prob. 2PCh. 2 - Prob. 3PCh. 2 - Prob. 4PCh. 2 - Prob. 5PCh. 2 - Prob. 6P
Ch. 2 - Prob. 7PCh. 2 - Prob. 8PCh. 2 - Suppose the demand function for jelly beans in...Ch. 2 - Prob. 10PCh. 2 - Prob. 11PCh. 2 - Suppose the annual demand function for the Honda...Ch. 2 - Prob. 13PCh. 2 - The demand function for a product is Qd = 100 ...Ch. 2 - Prob. 2CPCh. 2 - Prob. 3CPCh. 2 - Prob. 4CPCh. 2 - Suppose that the demand function for jelly beans...
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