Subjects taken at the University of Queensland nearly always prescribe a textboo
ID: 1131976 • Letter: S
Question
Subjects taken at the University of Queensland nearly always prescribe a textbook. The textbook can be examinable so it may be necessary for students to obtain the text, if they wish to get a good grade Answer the following questions a. For many students, the price of purchasing a car is a large percentage of their budget so demand will be more compared to the demand of a textbook, ceteris paribus. Type E for Elastic, I for Inelastic or U for Unit Elastic. b. Suppose the UQ branch of the Co-op Bookshop sold a course textbook in 2014 for $159.99 and sold 35 copies that year. In 2015, the same course textbook was sold for $139.99 and sold 212 copies. It cannot be assumed that the demand curve is linear. What is the price elasticity of demand using the mid-point formula? 0.10 decimal places . Answer to the nearest two c. Assume the Co-op Bookshop is trying to maximise revenue. Considering your findings in part b), did the Co-op Bookshop's decision to decrease the price of the textbook agree with increasing revenue? N No or U for Unknown . Type Y for Yes, N for QUESTION 6 Every year, over 200,000 tourists come from all over the world to visit the Taj Mahal in India. On any given day outside the Taj Mahal, there are many local vendors selling exactly the same souvenirs to tourists at the same price 1. The demand curve of the souvenir market is perfectly elastic 2. The demand curve of a souvenir vendor is perfectly elastic. 3. The demand curve of the vendor is perfectly inelastic Which of the above statements are true Only 1 is true Only 2 is true Both 1 and 2 are true Both 2 and 3 are true All three are trueExplanation / Answer
5..)
a)
Demand tends to be more elastic when larger portion of item is spent on specific item.
Hence, right answer is : E ( Elastic)
b)
Change in price Level = 159.99 – 139.99
= 20
Change in quantity = 212- 35
= 177
Formula:
= ( Q1 –Q2) / P2 – P1) * Q1 +2 / P1+P2
= 177/20 * 299.98 / 247
= 53,096 / 4940
= 10.74
c)
Since elasticity of demand is greater than unity or demand elastic. Hence there should not be rise in price level it will affect profit adversely.
Right answer is : N
6 )
Demand for perfectly market is not perfectly elastic, it perfectly elastic for single firm or vendor.
Hence, right answer is : Only 2