(a)
To fill the given box.
Explanation of Solution
Use the following formula to find the
Find the values of Qdby inserting the values in
P | 0.10 | 0.45 | 0.50 | 0.55 | 2.50 |
Qd | 290 | 255 | 250 | 245 | 50 |
eQ,P | −0.035 | −0.176 | −0.2 | −0.225 | −5 |
(b)
To draw the graph for demand function.
Explanation of Solution
To plot the graph just find out inverse demand function.
The inverse demand function,
When
Similarly, when quantity is zero then price is $3.
The Y axis of graph shows the price and x axis shows the quantity. When price is $3 then quantity demanded is zero. When price is zero then the quantity demanded is 300 units.
(c)
To find the price at which demand is unitary elastic.
Explanation of Solution
Elasticity of demand is equal to:
Let's take the price $1.50, then the elasticity of demand is -1.
Thus, at price $1.50 the demand will be unitary elastic.
(d)
To find the price at which demand is inelastic.
Explanation of Solution
Elasticity of demand is equal to:
Let's take the price $1.50, then the elasticity of demand is -1.
Here, all price below $1.50 will give
(e)
To find the price at which demand is elastic.
Explanation of Solution
Elasticity of demand is equal to:
Let's take the price $1.50, then the elasticity of demand is -1.
Here, all prices above $1.50, will give the demand is elastic.
Want to see more full solutions like this?
Chapter 2 Solutions
EBK MICROECONOMICS
- Economics: Private and Public Choice (MindTap Cou...EconomicsISBN:9781305506725Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage LearningMicroeconomics: Private and Public Choice (MindTa...EconomicsISBN:9781305506893Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage LearningMicroeconomics: Principles & PolicyEconomicsISBN:9781337794992Author:William J. Baumol, Alan S. Blinder, John L. SolowPublisher:Cengage Learning