This Expert Q&A includes sub-parts. Please use 5 and 5 for point A. Ratio is 1:1

Question

This Expert Q&A includes sub-parts.

Please use 5 and 5 for point A. Ratio is 1:1

1) What is the price elasticity when consumers leave the Ferrari market by 1 vehicle?

A) Eps = 1.00

B) Epd = 1.29

C) Eps = 1.29

D) Epd = 1.00

2) Referring to the point you left off on in question 1, what is the price elasticity when new machinery is invented increasing the number of vehicles by 4?

A) Eps = 0.34

B) Epd = 2.99

C) Eps = 0.34

D) Epd = 2.99

3) Referring to the point you left off on in question 2, what is the price elasticity when a government decreases subsidies leading to 2 vehicles less?

A) Eps = 6.90

B) Epd = 0.15

C) Eps = 0.15

D) Epd = 6.90

4) Referring to the point you left off on in question 3, what is the price elasticity when consumers expect the price of Ferrari to increase next week, leading to 4 more vehicles?

A) Eps = 2.00

B) Epd = 0.50

C) Eps = 0.50

D) Epd = 2.00

Explanation / Answer

D) Epd = 1.00

D) Epd = 2.99

C) Eps = 0.15

C) Eps = 0.50

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