Could really use some help answering these question and could you give a brief e
ID: 1151617 • Letter: C
Question
Could really use some help answering these question and could you give a brief explination Thanks!
Studks indicate that the price elasticity of demand for beer is about 0.9 A governmd polcy aimed at reducing beer consumption changed thbe prixe of a case of beer from 10 to $20 According to the midpoint method, the govermment pokcy sbould have ed wced beer cons umption by (a) 30%. (b) 40%. (c) 60%. (d) 74%. mand eurve throagh a gwen paint (a) geater the price elasticity of demand at that point. (b) smalker the price easticity of demand at that point (c) clkser the price easticity ol demand will be to the slope of the curve (d) greater the abeolute vahe of the chang in total reve ase when there is a ov nom that point upward and to the left along the demand curve 7 I a change in the prike of a good sults in o chang in total revensue, the (a) the demand for the good st be elast ic (b) the demand for the good st be inelasti (c) the demand for the good st be unit elast d) buyers ist not sespand wery ch to a chan g in price lf the demand for textbooks is inelasti,them an increase in the price of textbooks will (a) inceas total revene of tect book sellers (b) decrease total evene of textbook sellets. (c) mot dhange total rve of teact book wellers (d) There is ot eough information to answer this questionExplanation / Answer
7. c) the demand for the good must be unit elastic.
Whe change in price does not affect the total revenue of firm then price elasticity of demand is unit elastic which means % change in price is equal to % change in quantity demanded.
8. a) increase total revenue of textbook sellers.
Inelastic demand means change in price does not affect its quantity demanded. Increase or decrease in price does not increase or decrease quantity demanded. It means at higher price also, firm is able to sell same units of commodities. This increases total revenue of firm.
9. b) percentage change in quantity demanded of bread divided by percentage change in price of butter.
Cross price Ed = % change in quantity demanded of good x / % change in price of good y
10. b) negative
Perfect complements are those good which jointly satisfy a particular want of consumer. Increase in price of one good decreases demand of other and vice-versa. Example: Bread and butter, car and petrol, etc. So, cross price Ed is negative for complementary goods.