Calculate the cross-price elasticity for the following goods. Determine if they are substitutes or complements?

A. The price of airline tickets goes up by 20 percent, causing the quantity demanded of gasoline to go up by 5 percent.

B. The price of pancake flour goes up by 10 percent, causing the quantity demanded of pancake syrup to drop by 20 percent.

C. The price of coffee goes up by 5 percent, causing the quantity demanded of tea to increase by 5 percent.

D. The price of computers goes up by 5 percent, causing the quantity demanded of flash drives to drop by 2 percent.

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Divya SinghLv10

28 Sep 2019

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Related questions

a. If a 10 percent increase in price decreases the quantity demanded by 12 percent, the price elasticity of demand is ____________.

b. The price of strawberries falls from $1.50 to $1.00 per carton and the quantity demanded goes from 100,000 to 200,000 cartons. Calculate the price elasticity of demand and interpret it in words.

c. At the present level of consumption, 4,000 movie tickets, and at the current price, $5 per ticket, the price elasticity of demand for movie tickets is 1. Calculate the percentage by which the owners of movie theaters must reduce the price in order to sell 5,000 tickets.

d. The price elasticity of demand for ice-cream sandwiches is 1.2 at the current price of $0.50 per sandwich and the current consumption level of 100,000 sandwiches. Calculate the change in the quantity demanded when the price rises by $0.05.

e. Calculate the price elasticity of supply for web-design services when the price per hour rises from $100 to $150 and the number of hours transacted increases from 300,000 to 500,000. Is supply elastic, inelastic, or unit elastic?

crimsonhamster810

1. If the cross-price elasticity of demand between printed textbooks and e-books is +0.20,

If textbook prices increase by 6 percent, by how much will e-book demand change?

Enter your response as a percent to one decimal place.

2. Gasoline prices topped 3$ a gallon SUV sales will decrease if gasoline prices reach 3.50-4.00$ a gallon

If a gasoline price hike of 4 percent caused the SUV sales drop described, what is the cross-price elasticity of demand between gasoline and SUVs?

3. By how much will popcorn sales increase if average income goes up by 10 percent? (Assume the income elasticity of popcorn is 3.29.)

4. Compute the price elasticity between point G to H.

G= 0.20$ per ounce with 16 ounces

H= 0.25$ per ounce with 20 ounces

5. By what percentage will cigarette sales decline in the short run, round to one decimal? Price elasticity= 0.4

copperhyena841

29. Given the following demand and cost functions, determine the output and sales level that maximize profit.
Demand Function: Q = 25- P; Cost Function: TC = 20+5Q +Q2 (Points : 1) 20 Units
200 Units
5 Units
None of the Above

30. Assume the price of product B, increases from $1 to $1.50. As a result, the quantity demanded of product "A increases from 500 to 600 a month. This indicates that the cross-price elasticity and relationship between the two products. (Points : 1)

.50, Substitutes
.45, Substitutes
.45, Complements
.50, Complements
Products are not related

31. Given the marginal revenue from a product is $15 and the price elasticity of demand is -1.2, what is the price of the product? (Points : 1)

Not enough Information
$8
$88
$42
$68

32. Given the demand function: QD = -10-2.1 P +.62 Y. Where P is price and Y is Income (Points : 1)

For a 1% increase in price, quantity demanded falls by 2.1%
For a 1% increase in price, quantity demanded increases by .62%.
For a 1% decrease in price, quantity demanded increases by 2.72%
None of the above