Class assignment

1. Suppose Starbucks reduces the price of frappe from $2.20 to $1.80 per cup, and as a result the quantiy demanded per day increased from 350 to 450. What is the price elasticity of demand for Starbucks frappe'? Use the mid-point formula. 2. If the price of a cappuccino increases by 20%, and the supply increases by 40%, what is the price elasticity of supply? 3. Dunkin Donuts increased the price of bagels from $3.50 per dozen to $4.00 per dozen. Consequently, the demand falls frOm 400 to 300 dozen. Calculate the price elasticity of demand using the simple method. 4. When the price of a small pepperoni pizza decreased from $16 to $14, Pizza Hut reduces the supplly from 600 to 400 per week. Calculate the price elasticity of demand using the mid-point formula. 5. At a price of $4, quantity supplied is 100; and at a price of $6, quantity supplied is 120. Using the midpoint formula, the price elasticity of supply is and supply is 6. A decrease in the price of tacos from $2.35 to $1.99 causes a decrease in supply from 1,550 to 1,225. Calculate the price elasticity of supply using the simple method. 7. The table below gives demand and supply schedules for batteries. Price Quantity Quantity demanded supplied $150750 450 $3.00 700 550 $4.50 650 650 $6.00 600 750 $?.50 550 850 $9.00 500 950 a. What is the equilibrium quantity? b. What is the equilibrium price? Suppose the demand increases by 100 batteries per day and the supply decreases by 50 batteries per day. 0. What is the new equilibrium price? d. What is the new equilibrium quantity