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Answer to Question #15420 in Microeconomics for mark

Question #15420
1. Use the information in the table below:
a) calculate elasticity over each of the price ranges (e.g. $25 to $20, $20 to $15, etc.) and enter the values in the table below

b) calculate total revenue (total expenditure) for each price and quantity demanded combination and enter the values in the table below.

c) divide one piece of graph paper in half; plot the demand curve in the bottom half and indicate which portions of the curve are inelastic, unit elastic and elastic in the graph below; plot the total revenue in the graph directly above the graph of the demand curve.

Market for Pizza per hour
Price ($) Quantity Demanded
#/hour Price Elasticity of
Demand Total Revenue
25
0
20 10
15 20

12.50 25
10 30
5 40
0
50


2. If a 2 per cent rise in the price of orange juice decreases the quantity demanded of orange juice by 22 per cent and increases the quantity demanded of apple juice by 14 per cent, calculate the cross price elasticity of demand between orange juice and apple juice.

3. Judy’s income has increased from $13,000 to $17,000. Judy increased her demand for concert tickets by 15% and decreased her demand for bus rides by 10 %. Calculate Judy’s income elasticity of demand for concert tickets and bus rides.

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