(i) Assume that the demand for smoked salmon is represented by the following demand curve: P = 100 – 8Q.
Draw a diagram representing the demand curve and calculate the price elasticity of demand when the price equals $20.
Â
(ii) Now assume that there is an increase demand so that the new demand curve is:
P = 100 – 4Q.
On the same diagram used in (i) represent the new demand curve and calculate the price elasticity of demand when price equals $20.Â
Â
(iii) Now assume there is a further increase in demand so that the new demand curve is: P = 200 – 8Q.
On the same diagram used in (i) represent the new demand curve and calculate the price elasticity of demand when price equals $20.
Â
(iv) Can any relationship be established between the price elasticity of demand and the slope of a linear demand curve?
Â
(b)Â (Consider good A the demand for which is Q = 100 when consumer income is $150 per week. When consumer income is observed to increase to $250 per week demand for good A is Q = 200.
Â
(i) Using the mid-point method, calculate the income elasticity of demand for good A.
Â
(ii)What does this tell us about good A?Â
Answers
Status NEW
Posted 17 May 2017 05:05 AM
My Price 10.00
-----------
Attachments
file 1495000382-Solutions file.docx preview (56 words )
S-----------olu-----------tio-----------ns -----------fil-----------e
-----------Hel-----------lo -----------Sir-----------/Ma-----------dam-----------
T-----------han-----------k y-----------ou -----------for----------- yo-----------ur -----------int-----------ere-----------st -----------and----------- bu-----------yin-----------g m-----------y p-----------ost-----------ed -----------sol-----------uti-----------on.----------- Pl-----------eas-----------e p-----------ing----------- me----------- on----------- ch-----------at -----------I a-----------m o-----------nli-----------ne -----------or -----------inb-----------ox -----------me -----------a m-----------ess-----------age----------- I -----------wil-----------l b-----------e q-----------uic-----------kly----------- on-----------lin-----------e a-----------nd -----------giv-----------e y-----------ou -----------exa-----------ct -----------fil-----------e a-----------nd -----------the----------- sa-----------me -----------fil-----------e i-----------s a-----------lso----------- se-----------nt -----------to -----------you-----------r e-----------mai-----------l t-----------hat----------- is----------- re-----------gis-----------ter-----------ed -----------onÂ----------- th-----------is -----------web-----------sit-----------e.
-----------
H-----------YPE-----------RLI-----------NK -----------&qu-----------ot;-----------htt-----------p:/-----------/wo-----------rkb-----------ank-----------247-----------.co-----------m/&-----------quo-----------t; -----------\t -----------&qu-----------ot;-----------_bl-----------ank-----------&qu-----------ot;-----------
-----------Tha-----------nk -----------you-----------
-----------
Not Rated(0)