The following graph will represent U.S. dollars on the y-axis and lbs. on the x-

ID: 2494549 • Letter: T

Question

The following graph will represent U.S. dollars on the y-axis and lbs. on the x-axis.

1) Refer to the figure above. Calculate the price elasticity when more consumers enter the market of Good X by 3 lbs.

A) EpD = 1.28

B) EpS = 0.57

C) EpD = 0.57

D) EpS = 1.28

2) From number 11 (point B), calculate the price elasticity when technology is introduced in Good X leading to an increase of 5 lbs.

A) EpD = 0.65

B) EpS = 1.54

C) EpD = 1.54

D) EpS = 0.65

3) From number 12 (point C), calculate the price elasticity when consumers prefer less of Good X leading to a decrease of 6 lbs.

A) EpD = 0.35

B) EpS = 0.35

C) EpD = 2.89

D) EpS = 2.89

4) From number 13 (point D), calculate the price elasticity when a tax is implemented in Good X leading to a decrease of 5 lbs.

A) EpD = 1.99

B) EpS = 1.99

C) EpD = 0.50

D) EpS = 0.50

12 So 101 8 6 4 2 Do 5 10 15

Multiple questions asked.

Q1 is answered below.

Market equilibrium P=$7 and Q=8 units.

When more consumers enter the market, making Q=8+3 = 11 units, then P becomes $9 (DD shifts to the right)

Thus, Price elasticity of demand = (Change in Q/Change in P)(P/Q)

Price elasticity = (11-8)/(9-7)×(7/8)

Price elasticity = 1.3

Thus, correct option: (A) EpD = 1.28

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