ECON101 Lecture 8: Week 4 / Jan 30

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indigomouse415

10 Feb 2017

School

University of Alberta

Department

Economics

Course

ECON101

Professor

Gordon Lee

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ECON101 Full Course Notes

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Document Summary

Price elasticity of demand measures the responsiveness of quantity demanded to a change in the price. The size of the elasticity of demand is in uenced by: the # of substitutes. The more substitutes good a has, the more consumers can respond to a change in the price of good a. Thus, the more elastic is the demand for good a. (or the # of perceived substitutes - due to brand loyalty: time. The moe time consumers have, the more they can respond to a change in the price and again the more elastic demand is. (this is why tax is used: whether the good is a necessity or a luxury. The demand for a luxury is more elastic than the demand for a necessity. But tax it! (when people can"t pay tax, they get investigated, go to jail, then revenue.

Related Questions

I am having a tough time with this homework question. Please try to show work if possible! Thank you!

Garden of Edam sells fondue kits over the internet. The demand function for this product is Q = 20 - (1/3)P, where Q is the number of kits sold per week and P is the price per kit.

1. Solve for the inverse demand function. __I think it would be P=-60-(1/3)Q but correct me if I'm wrong please! Thanks!__________

2. What is the slope of this relationship in the standard P/Q diagram? ______________

3. Compute the point price elasticity of demand (PED) when

Q = 20 ________________ Q = 6 _________________

4. Compute the point PED when P = 30 __________ and P = 60 _____________.

5. Give a one sentence quantitative interpretation of the Q = 6 elasticity.

_____________________________________________________________________

6. Give a one sentence qualitative interpretation of the Q = 6 elasticity.

_____________________________________________________________________

7. Write the equation showing kit total

revenue (TR) as a function of Q. ___________________________________

8. Write the equation showing marginal revenue

(MR) as a function of Q. ___________________________

ivorycockroach840

Use the following demand schedule for a monopolist to calculate total revenue and marginal revenue. For each price, indicate whether demand is elastic, unit elastic, or inelastic.

price (P)($)	Quantity demanded (Q)	Total Revenue	Marginal Revenue	Price Elasticity of demand (Ed)
5.00	0
4.50	1
4.00	2
3.50	3
3.00	4
2.50	5
2.00	6
1.50	7
1.00	8
0.50	9
0.00	10

beigefish857

Use the following demand schedule for a monopolist to calculate total revenue and marginal revenue. For each price, indicate whether demand is elastic, unit elastic, or inelastic.

Price (P)($)	Quantity demanded (Q)	Total Revenue	Marginal Revenue	Price Elasticity of demand (Ed)
5.00	0
4.50	1
4.00	2
3.50	3
3.00	4
2.50	5
2.00	6
1.50	7
1.00	8
0.50	9
0.00	10

beigefish857

ECON101 Lecture 8: Week 4 / Jan 30

ECON101 Full Course Notes

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