# what percentage will quantity demandedfall orrise?

September 8, 2020
###### service marketing case
September 8, 2020

## List the five factors that make demand for a goodmore or less elastic.

List the five factors that make demand for a goodmore or less elastic.

Question

Problem3 Determinants
ofelasticity

List the five
factors that make demand for a goodmore
or less elastic. Give an exampleforeach(preferablyoneIdidn’ttalkaboutinclass).

1.

2.

3.

4.

5.

# ………

Problem4 Elasticity
#1

a.
Ifyourincomerisesby20%andyoudecidetoincreaseyourpurchasesofclothing
elasticity of demand for clothing? Is clothing a normal or inferiorgood?

b.
questions:

If income rises by1%, by
what percentage will the demand for gadgets fall orrise?

If income falls by10%, by
what percentage will the demand for gadgetsfall orrise?

c.
the followingquestions:

If the price of gadgets rises by1%, by
what percentage will the demand for widgetsfallorrise?

If the price of gadgets falls by3%, by
what percentage will the demand for widgetsfallorrise?

# ………

Problem5 Elasticity#2

1.
If price elasticity of demand is
1.25, and price rises from \$8 to \$12, bywhat
percentage will quantity demanded fall?

2.
Ifincomeelasticityofdemandis-0.75,andincomesfallfrom\$52,500to\$51,000
per capita (per person), then by
what percentage will quantity demandedfall orrise?

3.
Supposeyou’recurrentlysellingslicesofpizzafor\$3each,andthepriceelastic-
ityof demand for pizza is 3. By
what amount (in dollars and/or cents) would youhavetoreduceyourpricepersliceinordertoincreasenumberofslicesyousell by15%?

# ………

Problem6 RelatedGoods

1.
Ifthepriceoflasereyesurgeryfallsby50percentandthequantityofcontact lensesdemandedfallsby25percent,findthecrosspriceelasticityofdemand
forthesetwogoods.

2.
Arelasereyesurgeryandcontactlensessubstitutesorcomplements?

3.
Suppose the price of laser eyesurgery falls from \$3,000 to \$2,500.
By what percentagewillsalesofcontactlensesfalls?

# ………

Problem7 Comparingdemands

# ………

Problem8 Perfection#1

Drawaperfectlyinelasticdemandcurve.

# ………

Problem9 Elasticity
andprices

Hint: draw graphsforthese

1.
If the demand for a goodis perfectly elastic and its price is
\$15, howmuchwoulditspricebeifitssupplydoubled?

2.
If the demand for a goodis perfectly inelastic and its price
is \$50, howmuchwoulditspricebeifitssupplydoubled?

# ………

Problem10 Perfection#2

1.
Thedemandforaproductisperfectlyinelasticandthesupplyoftheproductis
perfectlyelastic.Ifitsequilibriumpriceis\$10,drawagraphrepresentingthis market.

2. Onthesamegraph,showanewequilibriumpriceof\$20.

# ………

Problem11 Perfection#3

1.
Thesupplyofaproductisperfectlyinelasticandthedemandfortheproductis
perfectlyelastic.Ifitsequilibriumpriceis\$50,drawagraphrepresentingthis market.

2. Onthesamegraph,showanewequilibriumpriceof\$25.

# ………

Problem 12 Predictingthe priceof oil

Intheyear2020theworldsupplyofoilpeaksandproductioncontinuesforthenext

# ………

Problem 13 Elasticity
andcigarettes

Ifthepriceelasticityofdemandforcigarettesamongteenagesis0.5,howmuchwould
the price of a pack of cigarettes haveto
beraised from \$10 to cut teenage
smoking by20%?

# ………

List the five factors that make demand for a goodmore or less elastic.

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