Answer to Question #68106 in Microeconomics for sumit sinha

Question #68106

if short run elasticity in 0.3 and price falls by 30% what is change in quantity ?

Expert's answer

If E = 0.3, dP = - 0.3P, then E = (dQ/Q)/(dP/P), dQ/Q = 0.3*(-0.3P/P) = -0.09.
So quantity falls 9 %.

Learn more about our help with Assignments: Microeconomics

Comments

No comments. Be the first!

Leave a comment

Related Questions

1. Demand curves indicates maximum or minimum or average or lowest amount that the consumers are ready
2. 5.The Enviro-Guard Co. manufactures a line of heat pumps that typically are sold in the sunbelt stat
3. 3.The Branline Corp. produces treated fence posts in an old plant with these production and price da
4. 1.The Bell Corp manufactures plastic broom and mop holders, and the production function for the
5. The short run cost function of a firm is as follows: total cost=200+5Q+2Q^2 :where Q=physical units
6. All firms have the same MC curve; it always costs $5 to make each jar of honey. Demand for honey is
7. With demand function P = 120 -2Q and MC= 20. What is the optimal quantity and price for four identi