Question

rice Per Calculator (5) Quantity X + arses/2040809/quizzes/3794201/take [Note: you will need to upload your work for this question on the next question] Question 11 8 pts Suppose the price elasticity of demand for a basket of fruits is 2.0. You are currently charging $42 per basket. If you want to increase the quantity of fruit baskets sold by 20 percent, you should charge a price equal to $_ Use midpoint formula. Note that this question requires you to show your work for Question 10. If you type out your work, convert the the document to PDF and upload the file using the upload link to this question. If you handwrite you work, scan or take a picture and upload it to this question. Double-check to make sure it's the file you intend to upload and that it's clear enough to be graded Upload Choose a File D Question 12 3 pts Marginal Social Cost (dollars per course) Quantity (number of students) Marginal Private benefit Marginal Social Benefit 100 4,500 20 80 4.000 40

Answer 1

11. 38

(According to midppoint method of elasticity of demand, elasticity = Percentage change in quantity demanded/Percentage change in price = -2
So, Percentage change in price = Percentage change in quantity demanded/-2 = 20%/-2 = 0.2/-2 = -0.1
Percentage change in price =

P-422(P - 42) 2P - 84 P+42= P+42+ P+42

So, (2P-84)/(P+42) = -0.1
So, 2P-84 = -0.1(P+42)
So, 2P-84 = -0.1P - 4.2
So, 2P + 0.1P = 84 - 4.2
So, 2.1P = 79.8
So, P = 79.8/2.1
So, P = 38)