Investigate how demand elastiticities are affected by increases in demand. Shift each of the demand curves in
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Investigate how demand elastiticities are affected by increases in demand. Shift each of the demand curves in Figures 4.2a, 4.2b, and 4.2c to the right by 10 units. For example, point a in Figure 4.2a would shift rightward from location (10 units, $2) to (20 units, $2), while point b
would shift rightward from location (40 units, $1) to
(50 units, $1). After making these shifts, apply the midpoint formula to calculate the demand elasticities for the shifted points. Are they larger or smaller than the elasticities you calculated in problem 1 for the original points? In terms of the midpoint formula, what explains the change in elasticities? LO1
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Related Book For
Essentials Of Economics
ISBN: 9780077502140
3rd Edition
Authors: Stanley Brue, Campbell McConnell, Sean Flynn
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