Hi Tutors,
Please help me solve all of #3 and #4
Thank You and Take Care
Problem 3. (15 points) Elasticity Researchers have used changes in photovoltaic panel (PV) prices to estimate the elasticity of demand for home solar installations. Suppose that in 2012, the price of PV panels was about $4.90 per megawatt (MW) and homeowners the quantity sold was 4,100 MW of PV panels. By 2014, the price of panels had fallen to around $4.10 per MW and the quantity sold rose to 4,600 MW. Assume there were no other changes influencing this market so that you can use these numbers to calculate the price elasticity of demand for PV panels. (hint: each of the numbers belongs in one of these spots, keep $ signs on the price values to help keep things organized) 2012 Q of solar panels sold = 2012 Price of solar panels = 2014 Q of solar panels sold = 2014 Price of solar panels = a) Using the midpoint formula, the quantity of solar panels sold rose as solar panel prices fell % . Show all of your calculations. b) Put the two together to calculate the price elasticity of demand for solar panels. Is demand for solar panels relatively elastic or inelastic? c) As prices fell, did total revenue earned by companies selling solar panels rise or fall? Support your answer with calculations and/or a logical argument.Part 2 - Applying elasticity. Use the value for the price elasticity of demand from above to answer the following questions. Assume the price elasticity of demand stays stable over time. e) If solar panel prices fall 10% next year, what will happen to the number of solar panels sold, if all other factors stay constant? Show your work and summarize your results in a sentence. f) How much would solar panel prices need to fall in order to increase the quantity sold by 30% next year, if all other factors stay constant? Show your work and summarize your results in a sentence