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November 21, 2022

What is the price elasticity of demand? How is it calculated?

Question #1: What is the price elasticity of demand? How is it calculated? — Lecture recording #1 https://screencast-o-matic.com/watch/cYf13waXGc

Question #2: The makers of academic books find that when they raise the price of the average book from $50 to $75, quantity demanded among students drops from 100 to 90. Among casual readers, quantity demanded drops from 80 to 40 — Lecture recording #1 https://screencast-o-matic.com/watch/cYf13waXGc

2a. Calculate the price elasticity of demand for each group.

2b. Is demand price elastic or price inelastic for each group?

2c. Using the determinants of demand, explain why there is a difference in elasticity for each group.

Question 3: Explain why you agree or disagree with the following statement: “Higher prices always yield higher revenues.” —- Lecture recording #2https://screencast-o-matic.com/watch/cYffec4NmB

Question 4: Please give an example in which the Income Elasticity is negative, make sure you write out the full logic — Lecture recording #3https://screencast-o-matic.com/watch/cYffYR49ZV

Question 5: What does Cross-price Elasticity measure? Please use your own words as if you are explaining it to your friend — Lecture recording #3 https://screencast-o-matic.com/watch/cYffYR49ZV

Question 6: Please explain why the following statement is true “Price Elasticity of Supply is always positive” — Lecture recording #4 https://screencast-o-matic.com/watch/cY6nqmKldG

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