Determine the price elasticity of demand for a microwave that experienced a 20% drop in price and a 50% increase in weekly demand quantity.

Question

I know I have to use the price elasticity of demand formula, but I keep getting the wrong answer. Can someone please help me?

Answer 1

The price elasticity of demand for color TVs is estimated to be -2.5. If the price of color TVs is reduced by 20%, how much percentage increase in the quantity of color TVs sold do you expect?

Answer 2

Suppose that output is a function of labor and capital. Assume that labor is the variable input and capital is the fixed input. Explain the law of diminishing marginal product. How is the law of diminishing marginal product reflected in the total product of labor curve?

Price (In Birr) Quantity Demanded (Per Month) Quantity Supplied (Per Month)
3 1,200 600
6 1,000 700
9 800 800
12 600 900
15 400 1,000

Answer 3

From your knowledge of the relationships among the various types of costs, complete the following table.


Output Total Total Cost Fixed
Cost
100 $ 260 $ ____ 200 ______ ______ 300 ______ ______ 400 ______ ______ 500 ______ ______ 600 ______ ______ 700 _____ ______
800 2,040 ______

Total Variable Cost
$ 60 _______ _______ _______ 360 _______ _______
_______

Average Fixed Cost
2 ______ ______ ______ ______ ______ ______
_______

Average Variable Cost
0.6 ______ 0.50 ______ ______ ______ 1.60
_______

Average Total Cost
2.6 ______ ______ 1.05 ______ ______ ______
_______

Marginal Cost

______ 0.30 ______ ______ ______ 3.00 ______
_______