Now let's see what happens when demand is perfectly elastic. In this case, the demand curve for photocopies is horizontal at a price of $10. On the diagram, shift the appropriate curve to illustrate the impact of a $2 per-unit tax placed on sellers. S Price 16 15 14 13 12 11 10 9 ● 8 7 6 5 4 3 2 1 O ! C > p Photocopies O 448 Quantity 4

Now let's see what happens when demand is perfectly elastic. In this case, the demand curve for photocopies is horizontal at a price of $10. On the diagram, shift the appropriate curve to illustrate the impact of a $2 per-unit tax placed on sellers. S Price 16 15 14 13 12 11 10 9 ● 8 7 6 5 4 3 2 1 O ! C > p Photocopies O 448 Quantity 4

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter5: Price Elasticity Of Demand And Supply

Section: Chapter Questions

Problem 3SQP

See similar textbooks

Similar questions

Under which circumstances does line tax burden fall entirely on consumers?
(Calculating Price Elasticity of Demand) Suppose that 50 units of a good are demanded at a price of Si per unit. A reduction in price to $0.20 results in an increase in quantity demanded to 70 units. Using the midpoint formula, show that these data yield a price elasticity of 0.25. By what percentage would a 10 percent rise in the price reduce the quantity demanded, assuming price elasticity remains constant along the demand curve?
Genovia has experienced exceptional growth in recent years. Its GDP per capita (orIncome) has increased from around $30,000 to $50,000 in last 5 years. Over theperiod quantity demanded of personal cars has increased from 450,000 units per yearto 600,000 units. Quantity demanded of public transport, however, has declined from10,000 buses to 7,000 buses. Calculate income elasticity of demand and tell whichproduct is a normal good and which one is inferior.
Give only typing answer with explanation and conclusion The elasticity of the house value with respect to the concentration level of PM10 is -9.3. Then a 11% decrease in the concentrations level of PM10 will change the house value by how much? (note: if the house value increases input a positive number if the house value decreases input a negative number)
The three-day nonstop untimely heavy rain caused by the cyclonic storm ‘Jawad’damaged many crops including winter vegetables, potatoes, Aman and Boro paddy inBangladesh. In your opinion, is this event more likely to hurt paddy growers if thedemand for rice is very elastic or very inelastic? Explain graphically.
Define unit-elastic ?
PriceQuantity20016312689412015What is the elastic of demand when prices rises from $12 to $16? Using midpoint method.Using Midpoint method when the price falls from $8 to $4 the price elasticity of demand is?
Zara purchases 2500 pieces of candies regularly given her income of 5000 pesos. She preferred to buy 1000 pieces less of the candies when her income is increased to 8000 pesos. Determine what kind of good is the candy by computing for the elasticity.
When the price of mustard oil increased from 70 taka per litre to 90 taka per litre thequantity demanded in the market fell from 47,000 litres to 40,000 litres. Using the pointelasticity method, calculate the price elasticity of demand of mustard oil. What type ofdemand does mustard oil have?
Your Best Brand Bike Shorts-BBB Shorts have been flying off the shelf. Your chiefeconomist tells you that during the Covid-19 pandemic, the taste for bicycling has shifted. Thedemand curve is much more inelastic. The price elasticity of demand has decreased from:-5.76 to -2.70.”Before the campaign your price was $240 per pair of BBB Shorts. What should bethe new price? Please show calculations.
just for part d and e Both airlines and supermarkets offer customer loyalty programs. However, airline frequent flyer programs seem to be much more profitable. In 2020, the American Airlines AAdvantage program in the United States was appraised to be worth over US$19.5 billion.a. Business executives often fly at the expense of their employer or clients. By contrast, leisure travelers typically pay for their own travel. Compare the price elasticity of the demands for air travel of business vis-à-vis leisure travelers.b. Explain how frequent flyer programs exploit the price inelastic demand of business travelers.c. European low-cost airline Ryanair caters mainly to people traveling for pleasure at their own expense. Can this explain why Ryanair does not run a frequent flyer program?d. Discuss whether there is a substantial segment of supermarket customers who shop at the expense of others.e. Drawing on your answers above, explain why airline frequent flyer programs yield more profit than…
Suppose the demand ourve for a product is given by Q-14-1P+ 2Ps where Pis the price of the product and Pg is the price of a substitute good. The price of the substtute good is $2.30. Suppose P-$1.00. The price elasticity of demand is -0.055 (Enter your response rounded to two decimal places.) The cross price elasticity of demand is 0 261. (Entor your response rounded to two decimal places.) Suppose the price of the good, P, goes to $2.00. Now the price elasticity of demand is(Enter your response rounded to two decimal places.)