Question

mceccmooms.net inelastic; less than 1.0. 14. According to the textbook, which of the following statements is (are) corect? (x) If the quantity demanded increases by a larger percentage than the percentage decrease in the price of the good, then the price elasticity of demand coefficient is a number larger than one. (y) If the coefficient of price elasticity of demand for a good is equal to 2.5, then a 25 percent increase in price results in a 10 decrease in the quantity demanded of the good. (z) If the price of Papa John's pizza increases by 8 percent and the quantity demanded of Papa John's pizza decreases by 12 percent then the coefficient of price elasticity of demand is equal to 1.5 and demand for Papa John's pizza is elastic. A. (x), (y) and (z) В. (x) and (y) only C. (x) and (z) only D. Exhibit 1 (y) and (z) only E. Quantity Demanded of Good F Quantity Demanded (x) only Price of Good F Price of Good H of Good H $96 $22 420 units 220 $104 180 $26 300 units 15, Use Exhibit 1. Which of the following statements is (are) correct? (x) Using the midpoint method, the coefficient of price elasticity of demand for Good F is equal to 2.5. (y) Using the midpoint method, the coefficient of price elasticity of demand for Good H is less than 2.1 but more than 1.9. (z) The demand for Good H is more price elastic than the demand for Good F. (x), (y) and (z) B A (x) and (y) only C. (x) and (2) only D. (y) and (z) only E. (x) only ECO 251-04E Assignment 14; Fall, 2019

Answer 1

14. Price Elasticity of demand % change in gly demanded I % change in brice 1. y the numerator u greater than the denominator then the above fracion will be greater than so (x) is true Ep i m aty demanded Y. in Price - |- 10%) = |-101 - 1-0.41 - 04 This calculation shows that is false % in aty demanded 1 % in price T 250T7 a sina coefficient of price elavicily is greater than I lapa John's Pizza is I dlastic Thus (2) is true Thus the correct oprion is c. (x) and (2) Only -

15. Mid point Method of Ep = 1802-0. } – Il Q2 +0./2) Date. Price Elasticare 2 P2 - P. 2 1 PatP, / 2 1 - GrowN EXX Price Elasicly of Demand Q1 = 220 Q2 = 180 for Good F P1 = $96 Pea 104 Oz7Q1/2: 180+ 220 - 400 - 200 02-Q = 180 – 220 = -40. Pzt Pi 12 = = 200 = 100 104 +96_ 2 104-96 P2 - P1 - = 8. - -40 200 J 100) = 15-40 x 1602 Il 20€ 181 - 1-2.5 = 2.5 Thus, (x) u correct L

Date.. brice Elasticity O2 = 300 - of demand 01 = 420 for Good H. P = $22 P = $26. 300 +420 = 720 - 360 Q2+ 2 Az - Q 2 - 300-420 = -120 = 26 +22 - 24. P2 t p 2 P2-P - = 26-22 = 4 1 (0 +01)/2) - P₂ tp, J/21 | -- JB x L - 1-2/2 2 360 8 X 1 This. (4) is true I Ep = 2.5 E = 2 Since & 7 E The Demand for Good F is more elastic than demand for Good H. The correct option is B. B. (x) and (y) only - - - -