Problem (2). If Neil\'s elasticity of demand for hot dogs is constantly 0.9, and

Question

Problem (2). If Neil's elasticity of demand for hot dogs is constantly 0.9, and he buys 4 hot dogs when the price is $1.50 per hot dog, how many will he buy when the price is $1.00 per hot dog?

Problem (3). Which of the following goods are likely to have elastic demand, and which are likely to have inelastic demand?

Problem (4). If supply is unit elastic and demand is inelastic, a shift in which curve would affect quantity more? Price more?

Problem (5). Jennifer advertises to sell cookies for $4 a dozen. She sells 50 dozen, and decides that she can charge more. She raises the price to $6 a dozen and sells 40 dozen. What is the elasticity of demand? Assuming that the elasticity of demand is constant, how many would she sell if the price were $10 a box?

Explanation / Answer

2.

% change in price=0.50/1.50=33%

Neil's elasticity of demand for hot dogs=0.9

% change in quanity demanded/% change in price=0.9

% change in quanity demanded/33%=0.9

% change in quanity demanded=33%*0.9=30% increase

how many will he buy when the price is $1.00 per hot dog=4*(1+30%)=5.20 or 5 units

the above is the answer

we do only one question based on Chegg rule.

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