Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Formula The formula PEDSame as:h / /h Elasticity Assignment Must incorporate all formulas and calculations must be clearly shown. Also state for each question whether

image text in transcribed

Formula The formula PEDSame as:h / /h

image text in transcribed
Elasticity Assignment Must incorporate all formulas and calculations must be clearly shown. Also state for each question whether the answer is Elastic, inelastic or unitary. 1. A ferry company reduces fares from $1.00 to 90 cents. Daily demand for tickets rises from 10,000 to 12,000. Calculate the price elasticity of demand. (3 marks) 2. The price of a product rises from $1.00 to 1:50. This leads to a fall in the quantity demanded from 1000 to 800 units. Calculate the price elasticity of demand for the product. (3 marks) 3. A retailer is desperate to increase his sales of telephone cards so he decides to reduce the price from $10 to $5. He is successful in increasing sales. The sales gures shows that sales move from 15 units to 25 units of telephone cards. Calculate the price elasticity of demand for the telephone cards. (3 marks) 4. A rise in the price of rice in a country from $1.00 per bag to $1.20 per bag leads to an increase in the quantity supplied by farmers from 1000 bags per month to 1300 bags per month. Calculate the price elasticity of supply

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Introductory Econometrics A Modern Approach

Authors: Jeffrey Wooldridge

7th Edition

1337558869, 978-1337558860

More Books

Students also viewed these Economics questions