ZuoTi.Pro
Question

The demand curve for a product is given by QX = 1200 – 3PX – 0.1PZ...

The demand curve for a product is given by QX = 1200 – 3PX – 0.1PZ where PZ = $300. a. Find the (own) price elasticity of demand when PX = $140. b. Is the demand is elastic or inelastic in (a)? Explain your answer. c. What would happen to the price elasticity of demand when a firm charges a price of good X is $240? (Hint: explain whether the demand is elastic or inelastic when PX is $240 and PZ = $300) d. Consider PZ = $300. What would happen to the firm’s revenue if it decides to charge a price above $240? Explain your answer by using elasticity and total revenue. (Hint: When demand is inelastic, |EP|=0.5, increasing price by 1% decreases quantity demanded by 0.5%. e. What is the cross-price elasticity of demand between good X and good Z when PX=$140 and PZ=$300? Show your work. f. Are goods X and Z substitutes or complements in (e)? Explain your answer

business   economics   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

0 0
Add a comment
Know the answer?
Add Answer to:
The demand curve for a product is given by QX = 1200 – 3PX – 0.1PZ...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • The demand curve for a product is given by QXd = 1,200 - 3PX - 0.1PZ...

    The demand curve for a product is given by QXd = 1,200 - 3PX - 0.1PZ where Pz = $300. a. What is the own price elasticity of demand when Px = $140? Is demand elastic or inelastic at this price? What would happen to the firm’s revenue if it decided to charge a price below $140? Instruction: Enter your response rounded to two decimal places. Own price elasticity: Demand is: If the firm prices below $140, revenue will: b....

  • 2. The demand curve for a product is given by Qdx= 1,000-2px .02Pz, where Pz= $40...continues

    2. The demand curve for a product is given by Qdx= 1,000-2px .02Pz, where Pz= $400a. What is the own price elasticity of demand when Px= $154? Is demand elastic or inelastic at this price? What would happen to the firm’s revenue if it decided tochange a price below $154?b. What is the own price elasticity of demand when Px= $354? Is demand elastic or inelastic at this price? What would happen to the firm’s revenue if it decided tocharge...

  • Chapter 3 Problems Saved Help Save & Exit Submit Check my work 2 The demand curve...

    Chapter 3 Problems Saved Help Save & Exit Submit Check my work 2 The demand curve for a product is given by ox 1200-3Px- 01Pz where P2 $300. a. What is the own price elasticity of demand when Px $140? Is demand elastic or inelastic at this price? What would happen to the firm's revenue if it decided to charge a price below $140? 10 points Instruction: Enter your response rounded to two decimal places. eBook Own price elasticity Print...

  • Exercise 1 ABC, Ltd. specializes in the production of a certain product X. The demand for...

    Exercise 1 ABC, Ltd. specializes in the production of a certain product X. The demand for its new brand of product X is given by: Q = 140 - 4P/ 1. ABC, Ltd. is currently charging $10 per unit of product. At this price, what is the price elasticity of demand for product X? 2. At a price of $10, what is ABC, Ltd's marginal revenue? 3. What price should ABC, Ltd. charge if it wishes to maximize its total...

  • The demand for company X's product is given by Qx = 2 - 3Px + 4Py...

    The demand for company X's product is given by Qx = 2 - 3Px + 4Py Suppose good X sells for $2.00 per unit and good Y sells for $4 per unit. a. Calculate the cross-price elasticity of demand between goods X and Y at the given prices. b. Are goods X and Y substitutes or complements? c. What is the own price elasticity of demand at these prices? Please show work

  • please calculate carefully The demand for good (Qx) is given by the following equation: Qx =...

    please calculate carefully The demand for good (Qx) is given by the following equation: Qx = 20,200 - 12.5 Px + 5 Py-M + 1.5 Ax Suppose the firm spends $3,000 per week on advertising (Ax), Px is $80, Py is $60, and income per capita (M) in the market area is $22,000. (a) Calculate the elasticity of demand for good X with respect to its own price, the price of good Y, and Income per capita. (3) (b) Calculate...

  • The demand for your product X has been estimated to be Qx = 7, 880 −...

    The demand for your product X has been estimated to be Qx = 7, 880 − 4Px − 2Py + Pz − 0.1M where Y and Z are other (related) products. The relevant price and income data are as follows: Px = 10, Py = 15, Pz = 50, M = 40, 000 (Please show work and answers to questions a-e) a. Which goods are substitutes for X? Which are complements? b. Is X an inferior or a normal good?...

  • Elasticity The demand for good X is given by: QDX = 200 – 10 PX. a....

    Elasticity The demand for good X is given by: QDX = 200 – 10 PX. a. Calculate the price elasticity of demand when PX = $10. b. At what price, if any, the demand is unitary elastic? c. Calculate the price elasticity of demand when PX = $5. d. According to your answer in “c” what will happen to total revenue as we raise the price? e. Calculate the change in TR as PX  from $5 to $8.

  • The demand for company X's product is given by Qx = 12 - 5Px + 4Py....

    The demand for company X's product is given by Qx = 12 - 5Px + 4Py. Suppose good X sells for $3.00 per unit and good Y sells for $1.50 per unit. a. Calculate the cross-price elasticity of demand between goods X and Y at the given prices. b. Are goods X and Y substitutes or complements? c. What is the own price elasticity of demand at these prices?

  • Suppose that the demand for good x is given by the equation Qx = 1,000 −...

    Suppose that the demand for good x is given by the equation Qx = 1,000 − 10Px. (a) Derive an equation for the inverse demand function, px(x). (b) Find the price and quantity combination that maximizes total revenue. (c) Calculate the price elasticity of demand for the price-quantity combination you found in part (b).

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT