Ch. 6: Simple Pricing
a. define the Law of Demand?
b. Explain the distinction between a change in demand and a change in quantity demanded?
c. create a demand curve from a simple demand schedule in Table 6.2?
d. determine the calculated values in a table such as Table 6.4?
e. Can you apply your understanding of Chapter 4s marginal analysis to pricing decisions in a price-making (versus price-taking) firm?
f. Can you explain in words what Own Price Elasticity, Cross-Price Elasticity, and Income Elasticity mean?
g. Given specific values for Own-Price Elasticity of Demand, can you determine whether demand for the good is elastic, inelastic, or unit elastic?
h. Given specific values for Cross-Price Elasticity, can you determine whether the two goods are substitutes or complements?
i. Given specific values for Income Elasticity, can you determine whether the good is a normal or inferior good?
j. Can you calculate each of these elasticities, such as in the homework?
k. Identify relatively elastic and inelastic demand curves?
l. List factors that may affect demand elasticity.
m. Indicate whether total revenue will increase or decrease as a result of a price change, depending on the demand elasticity?
The textbook used for this assignment is Managerial Economics, Froeb Chapters.
Ch. 6: Simple Pricing
a. define the Law of Demand?
b. Explain the distinction between a change in demand and a change in quantity demanded?
c. create a demand curve from a simple demand schedule in Table 6.2?
d. determine the calculated values in a table such as Table 6.4?
e. Can you apply your understanding of Chapter 4s marginal analysis to pricing decisions in a price-making (versus price-taking) firm?
f. Can you explain in words what Own Price Elasticity, Cross-Price Elasticity, and Income Elasticity mean?
g. Given specific values for Own-Price Elasticity of Demand, can you determine whether demand for the good is elastic, inelastic, or unit elastic?
h. Given specific values for Cross-Price Elasticity, can you determine whether the two goods are substitutes or complements?
i. Given specific values for Income Elasticity, can you determine whether the good is a normal or inferior good?
j. Can you calculate each of these elasticities, such as in the homework?
k. Identify relatively elastic and inelastic demand curves?
l. List factors that may affect demand elasticity.
m. Indicate whether total revenue will increase or decrease as a result of a price change, depending on the demand elasticity?
The textbook used for this assignment is Managerial Economics, Froeb Chapters.
Related textbook solutions
Related questions
(a) Explain why the cross elasticity of demand for substitute goods is positive and the cross elasticity of demand for complements is negative.
(b) Explain why the price elasticity of demand changes along a linear demand curve.
(c)
| Income | Px | Py | Quantity of good x | Quantity of good y |
| $30,000 | $6 | $3 | 2 | 20 |
| $50,000 | $6 | $4 | 5 | 10 |
(i) Using the information in the table, calculate the income elasticity of demand for good X and characterize the good. Use the midpoint formula.
(ii) Can you calculate the income elasticity of demand for good Y? If you can, show your calculation and characterize the good. If you cannot, explain why.
