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Q1 1.5-2/2 = 25% - Price 10-7/7 = 42.86% - Quantity 42.86% / 25% = 1.714 subscribe to is elastic because penury dos to a greater extent than professional rata to a deepen in wrong. Q2 2010 Price 1.25 2011 - Price 1.50 motley in Price = 1.25-1.50/1.50 = 20% Change in fill = 4.3% a. 4.3% / 20% = .215 = Demand is inelastic b. When requisite is inelastic a spread out in charge leads to a jump in agree revenue c. The time period allowed by-line a price change want is more price elastic, the longer that consumers shake off to respond to a price change. They have more time to depend for cheaper substitutes and switch their spending.?? Q3 a) Drugs Price -100 Demand 100 Drugs Price two hundred Demand 90 Computers - 100 Demand 100 Computers 200 Demand 20 Computers would undergo the highest quantity change because for elastic wells demand responds more than proportionately to a change in price. As the price for comput ers doubles, the demand for the good will shrink at a disproportionally great rate. b) Examples of inelastic goods would allow accelerator, tobacco and automobiles. This is because in that location is lack of block subsitutes in the market. In the study of gasoline and automobiles, these items are necessities for more or little people.

In the case of tobacco, the habitual nature of its use makes consumers less sensitive to the price of the good. Finally, these goods are broadly delineate. Examples of elastic goods would include Ford Automobilies, eating place meals, Pepsi. Because these goods or more narrowly defined they have more close subsitutes, which makes de mand more elastic. Restaurant meals and P! epsi are two closer to the luxury spectrum for most people. Q4 The resultant role is b or inelastic demand. As the price of the good goes up, the demand for the good remains constant. This graph and table would be standardized to what one might see for a medicine or medicine, as in question 3. Q5 The answer is a or elastic. The more close substitutes...If you want to get a replete essay, order it on our website: OrderEssay.net

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