21 views

Uploaded by LoganHarper

kkk

- Ps 7 Answers
- 46813882-A-Level-Economics-Revision-Notes
- solution manual World Trade and Payments: An Introduction
- QP HY 11-12 - Class - 10
- jessesicecreamstand9-12
- Minggu 7 Perencanaan Harga
- AQA A-Level Economics Specification
- Hughes Knittel Sperling 2006
- 1816853
- Paraskeva Et Al-2006-Earthquake Engineering & Structural Dynamics
- m.ekonomi21872
- CBSE Economics 2017 Board Questions
- Chap 6 mc
- CMAPart1A(Mircoeconomics)(2).doc
- Managerial Economics
- Answers to Homework 3 Fall 2014
- Microeconomics_All_chapters (1).pdf
- Micro Week 4.ppt
- Lecture-11.docx
- 4to Taller Ingles Utla-3

You are on page 1of 2

ELASTICITY EXERCISES:

1.

An airline has determined the demand for its flight from Vancouver to Fort St. John is given by:

p = 10 ( x 218) 2 3240 , where x is the number of tickets it can sell in a day and p is the price per

ticket. The current demand is 120 flights per day.

a) Use elasticity to determine if the airline should raise or lower the price to increase revenues.

b) What price will maximize revenues?

2.

A company can sell q = 80,000 widgets at a price of p each (the current price is $300 per widget).

500 p

a) Compute the elasticity of demand at the current price;

b) Should the company raise or lower the price if it wants to increase revenue?

3.

The demand function for a company's product is p = 60,000 (x + 3000) 1, with demand 3000 units

weekly.

a) Compute the elasticity of demand at the current demand.

b) Should the company raise or lower the price if it wants to increase revenue?

c) What price will maximize revenues? What will be the demand at this price?Skytrain used to

charge $2.00 per person (for a one-zone trip). Say the demand function for riding Skytrain is given

by x 2 + 450p = 1000, where x is the number of riders (in thousands) and p is the price of a one-zone

ticket in dollars:

a) Compute the elasticity of demand at p = $2.00.

b) Should the ticket price be raised or lowered to increase the revenue from the Skytrain?

c) What price will maximize revenues? What will be the demand at this price?

d ln x

. (HINT: use the chain rule twice.)

d ln p

4.

5.

Define the analogous quantity elasticity of supply and give an intuitive interpretation.

6.

Show that demand function p (x) = a x has constant elasticity |E| = 1, > 0, a > 0.

dp dx

7.

person is $400; for each additional person signed up the cost per person drops by $2.

a) Find the number of people that will maximize revenues.

67

MATH 1174 PROBLEM BOOK

b) What is the price per person when the number of people in (a) signs up?

c) How many people need to sign up so that the elasticity of demand is unity?

Why does this make sense economically? Explain.

8.

Show that, in general, since MC (x) > 0 for all x > 0, then at the x-value where profit is maximized the

demand is elastic (|E| > 1).

9.

Given when p = $2 the demand is 1000 units, and |E| = 0.4. Find the value of dx .

dp

10. (Problems #10 and #15 use linear approximation .) For the problem above use linear approximation

(tangent line approximation) to estimate the demand if the price rises from $2.00 to $2.25.

11. Assume that the demand equation for a certain product is given by q p 2 300 where q is the

maximum quantity demanded at price p per unit. For what value of p is the revenue maximized?

12. Given the demand curve x = 3a 2 p 2, a > 0:

b) Show that demand is unitary (|E| = 1) when p = a.

c) Find the values of p for which demand is inelastic, and elastic.

13. Suppose demand x for a product at unit price p is given by x (p) = a%p k, where a, k are constants.

(k > 0 and p > 0). Show that if the price increases by A per cent, then demand will drop by

approximately (k%A) per cent. Relate this to elasticity E. (HINT: Use differentials or a linear

approximation.)

14. Consider demand function x =

pb

a) Find E (p).

b) Show that there is no price p such that |E (p)| = 1 (unitary elasticity). Is |E| > 1 or < 1 for all p?

c) Form total revenue function R (p) = p x (p) = p

pb

have a maximum value. Relate the sign of R (p) to the value of |E| relative to unity found in (b).

Given that when p = $2 the demand is q = 1000 units, and the elasticity of demand is |E| = 0.4, find

the value of dq , then use a linear approximation to estimate the demand at a price of $2.15 per unit.

dp

- Ps 7 AnswersUploaded byAhmed Kanani
- 46813882-A-Level-Economics-Revision-NotesUploaded byrehanq
- solution manual World Trade and Payments: An IntroductionUploaded bysylvester
- QP HY 11-12 - Class - 10Uploaded bypromit guha
- jessesicecreamstand9-12Uploaded byapi-253059746
- Minggu 7 Perencanaan HargaUploaded byCynthia Permata Sari
- AQA A-Level Economics SpecificationUploaded byastargroup
- Hughes Knittel Sperling 2006Uploaded byVasco Vieira
- 1816853Uploaded byMarcela Barrios Rivera
- Paraskeva Et Al-2006-Earthquake Engineering & Structural DynamicsUploaded byHîm InPəršøn
- m.ekonomi21872Uploaded byanidzsm
- CBSE Economics 2017 Board QuestionsUploaded byHeena Maqsood Ahmad
- Chap 6 mcUploaded byKenneth Lau
- CMAPart1A(Mircoeconomics)(2).docUploaded byNancy Evangelista
- Managerial EconomicsUploaded byAshwini Mahale
- Answers to Homework 3 Fall 2014Uploaded byBrandon Rossman
- Microeconomics_All_chapters (1).pdfUploaded byAndoni García Pacheco
- Micro Week 4.pptUploaded byFarooq Ahmad
- Lecture-11.docxUploaded byRohitPatial
- 4to Taller Ingles Utla-3Uploaded byIvanRojas
- -Global Effects of Developed Country Trade Restrictions on Textiles and ApparelUploaded bylizyng27
- B-COM GP 1Uploaded byKhalid Aziz
- Econ - Exercise 1Uploaded byStefanie Estillore
- Micro Final NotecardUploaded byKaycee Lynn
- 320 33 Powerpoint Slides Chapter 2 DemandUploaded byAmit Dipankar
- Unit 1 ME.docxUploaded by11priyagarg
- IM- M4.pptxUploaded byAditya Choudhary
- Ques Sol 2012Uploaded byBrandonWu
- Midterm ExamUploaded byAhmed Mahmoud Abouzaid
- CSI Article - Non Linear CalculationUploaded bytarekhocine

- A Light on the Teaching of BhagavanUploaded by31TL22
- Spiritual eBook Nondual Ramana Maharshi Be as You Are CompleteUploaded byStephanie Euridite
- S1181_U03_NotesUploaded byLoganHarper
- Elasticity Exercises 1530Uploaded byLoganHarper
- Math 2310-001 Shahrokh 2016 30Uploaded byLoganHarper
- 0578069547_TantraUploaded byRagghu Rangswamy
- MATH_1174_001_collins_201620_HW_revised_29JUN16Uploaded byLoganHarper
- Math152_2015Uploaded byLoganHarper
- Chapter DosUploaded byLoganHarper

- Color Approval Procedure Manual.updated.02.19.15Uploaded bySaif Rahman
- letter of def susp - l g re 12finalUploaded byapi-287826317
- Bp-22 and Pd 1689Uploaded byMae Niagara
- Phonetics GiglioniUploaded bymorriganss
- System 84 WorkoutsUploaded byIsaiyah Carmona
- Numerical Methods in Heat Mass Momentum Transfer (Lecture Notes)JayathiMurthyUploaded byapi-3803751
- Eve Sorkin's Resume_2017Uploaded byAnonymous F7OSKI4zY
- 304-Hw9 CI and HT With Rv4(1)Uploaded bySomrita Banerjee
- tk_GWL_GB_230616_webUploaded byayavuzbvs
- Final Assignment International BusinessUploaded byKishin Sham Mahtani
- Loyalty Nomos LivUploaded byAlexandru V. Cuccu
- Type Moon GuideUploaded bymfsss666
- Seamus Blake Lets Call the While Thing Off Final DraftUploaded byNevio Zaninotto
- New York NY Sun 1905 Jan-Dec Grayscale - 0439 (Aso-neith Cryptogram)Uploaded bypgeronazzo8450
- Axiotou the Dilemma of SlaveryUploaded byamnatehreem
- Dtc Anghelus Ped 8th SemUploaded bySertug Başar
- Plagiarism Artikel Jurnal Keperawatan MuhammadiyahUploaded byanastasia
- Leadgen Ux PlaybookUploaded byPetrovic Tamara
- Topics of LecturesUploaded byKiky Rizky
- Personal Identity ContinuityUploaded byRansford Benson
- A Museum Studies Approach to HeritageUploaded byAmy Jane Barnes
- Prayer for Protection and HealingUploaded byautumnflame77
- How to Facilitate a Role Play - HandoutUploaded byJaleel Abdulla
- Liberation Tigers of Tamil EelamUploaded bySajjad Hanif
- 2002Protocol ISDAUploaded byAlex Bayot
- DANI CALIFORNIA - Red Hot Chili Peppers (Impresión)Uploaded byFelipe Consuegra
- Consolidation testUploaded bySailesh Rajbhandari
- Literature Review on SME Access to Credit in South Africa_Final Report_NCR_Dec 2011.pdfUploaded byMyat Thu Zar
- Principles of Vascular and Intravascular Ultrasound [PDF][tahir99] VRG.pdfUploaded byabidalik123
- Prosoniccombined - CopyUploaded byNaseer Hyden