ZuoTi.Pro
Question

5) Good X is elastic. Good Y is a complement. You are considering increasing Px. Will...

5) Good X is elastic. Good Y is a complement. You are considering increasing Px. Will your revenue rise or fall? Answer: the total revenue (joint TR for X and Y) will (pick one: rise, fall, remain the same, or ambiguous) because ...

6) Good X is elastic. Good Y is a complement. You are considering decreasing Px. Will your revenue rise or fall? Answer: the total revenue (joint TR for X and Y) will (pick one: rise, fall, remain the same, or ambiguous) because ...

7) Good X is inelastic. Good Y is a complement. You are considering increasing Px. Will your revenue rise or fall? Answer: the total revenue for X and Y will (rise, fall, remain the same, or ambiguous) because ...

8) Good X is inelastic. Good Y is a complement. You are considering decreasing Px. Will your revenue rise or fall? Answer: the total revenue (joint TR for X and Y) will (pick one: rise, fall, remain the same, or ambiguous) because ...

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

Homework Answers

Answer #1

(5)

Total revenue will fall because, increase in price of X will decrease its quantity demanded, and revenue from X will decrease as X has elastic demand. At the same time, higher price of X will decrease the demand for good Y as they are complements. Lower demand for Y will decrease the price of Y. As both price and quantity of Y will decrease, revenue from Y will decrease. Hence, total revenue (= Revenue from X + Revenue from Y) will decrease.

(6)

Total revenue will rise because, decrease in price of X will increase its quantity demanded, and revenue from X will increase as X has elastic demand. At the same time, lower price of X will increase the demand for good Y as they are complements. Higher demand for Y will increase the price of Y. As both price and quantity of Y will increase, revenue from Y will increase. Hence, total revenue (= Revenue from X + Revenue from Y) will increase.

(7)

Total revenue will be ambiguous because, increase in price of X will decrease its quantity demanded, and revenue from X will increase as X has inelastic demand. At the same time, higher price of X will decrease the demand for good Y as they are complements. Lower demand for Y will decrease the price of Y. As both price and quantity of Y will decrease, revenue from Y will decrease. Hence, change total revenue (= Increase in Revenue from X + Decrease in Revenue from Y) will be uncertain.

(8)

Total revenue will be ambiguous because, decrease in price of X will increase its quantity demanded, and revenue from X will decrease as X has inelastic demand. At the same time, lower price of X will increase the demand for good Y as they are complements. Higher demand for Y will increase the price of Y. As both price and quantity of Y will increase, revenue from Y will increase. Hence, change total revenue (= Decrease in Revenue from X + Increase in Revenue from Y) will be uncertain.

0 0
Add a comment
Know the answer?
Add Answer to:
5) Good X is elastic. Good Y is a complement. You are considering increasing Px. Will...
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

  • 5) Good X is elastic. Good Y is a complement. You are considering increasing Px. Will...

    5) Good X is elastic. Good Y is a complement. You are considering increasing Px. Will your revenue rise or fall? Answer: the total revenue (joint TR for X and Y) will (pick one: rise, fall, remain the same, or ambiguous) because ... 6) Good X is elastic. Good Y is a complement. You are considering decreasing Px. Will your revenue rise or fall? Answer: the total revenue (joint TR for X and Y) will (pick one: rise, fall, remain...

  • 1) Good X is elastic. Good Y is a substitute. You are considering increasing Px. Will...

    1) Good X is elastic. Good Y is a substitute. You are considering increasing Px. Will your revenue rise or fall? Answer: the total revenue (joint TR for X and Y) will (pick one: rise, fall, remain the same, or ambiguous) because ... 2) Good X is elastic. Good Y is a substitute. You are considering decreasing Px. Will your revenue rise or fall? Answer: the total revenue (joint TR for X and Y) will (pick one: rise, fall, remain...

  • 1) Good X is elastic. Good Y is a substitute. You are considering increasing Px. Will...

    1) Good X is elastic. Good Y is a substitute. You are considering increasing Px. Will your revenue rise or fall? Answer: the total revenue (joint TR for X and Y) will (pick one: rise, fall, remain the same, or ambiguous) because ... 2) Good X is elastic. Good Y is a substitute. You are considering decreasing Px. Will your revenue rise or fall? Answer: the total revenue (joint TR for X and Y) will (pick one: rise, fall, remain...

  • 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.

  • Consider a fall in the price of X in the standard two-good consumer model. Prove that...

    Consider a fall in the price of X in the standard two-good consumer model. Prove that if Y is a gross complement for X, then Y must be a normal good. You can arrive at an answer diagrammatically by considering the income and substitution effects of a fall in Px. If instead Y is a gross substitute for X, is it still true that Y must be a normal good? 2.

  • Write the number of each question (9)-(14) and the answer to each. (9) List one good...

    Write the number of each question (9)-(14) and the answer to each. (9) List one good that is a SUBSTITUTE for going to Lehman college ? (10) If the price of a SUBSTITUTE goes DOWN quantity demanded of of the other good will: (A) rise (B) fall (C) stay the same (11) List one good or service that is a COMPLEMENT for going to Lehman College. (12) If the price of a complement goes DOWN, the quantity demanded of the...

  • (b) You consume two goods, good x and good y. These goods sell at prices px...

    (b) You consume two goods, good x and good y. These goods sell at prices px = 1 and py = 1, respectively. Your preferences are represented by the following utility function: U(x; y) = x + ln(y): You have an income of m = 100. How many units of x and y will you buy and what will is your utility? If px increases from $1 to $2; figure out the compensating variation (CV) associated with price change. (c)...

  • The demand for good X is given by QXd = 6,000 - (1/2)PX - PY +...

    The demand for good X is given by QXd = 6,000 - (1/2)PX - PY + 9PZ + (1/10)M Research shows that the prices of related goods are given by Py = $6,500 and Pz = $100, while the average income of individuals consuming this product is M = $70,000. a. Indicate whether goods Y and Z are substitutes or complements for good X. Good Y is:  (Click to select)  a substitute  neither complement nor substitute  a complement  . Good Z is:  (Click to select)  a complement  a...

  • The demand function for good X is as follows: X= 25 + 5Py+ 5B-2PX A. What...

     The demand function for good X is as follows: X= 25 + 5Py + 5B -2Px A. What is the slope of this demand curve?  B. If Px=10, Py=3, and B= 10 derive the: a. Own demand elasticity at these values b. Cross elasticity at these values c. Income elasticity at these values.   C. Is good X elastic or inelastic at these values for income, price of good Y and price of good X? Is good Y a substitute or complementary good? And, is good X an...

  • 18. Two goods, X & Y, all called complements if a) An increase in Px causes...

    18. Two goods, X & Y, all called complements if a) An increase in Px causes more Y to be bought. b) An increase in Px causes less Y to be bought. c) An increase in Py causes less Y to be bought. d) An increase in income causes more of both X & Y to be bought. 19. If good X is a normal good and its price rises, then quantity demanded a) May or may not fall. 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