6. Assume the price elasticity of demand for Master chips is -2.0. If the company decreases the price of each bag of chips from $1.89 to $1.49, the number of bags sold will: * O Decrease by 39 percent. Increase by 47 percent. Increase by 39 percent. Increase by 24 percent.

6. Assume the price elasticity of demand for Master chips is -2.0. If the company decreases the price of each bag of chips from $1.89 to $1.49, the number of bags sold will: * O Decrease by 39 percent. Increase by 47 percent. Increase by 39 percent. Increase by 24 percent.

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter5: Elastic And Its Application

Section: Chapter Questions

Problem 3PA: Suppose the price elasticity of demand for heating oil is 02. in the short run and 0.7 in the long...

See similar textbooks

Related questions

Q: 4. Which of the following will NOT affect the price elasticity of demand for frozen peas? A The…

A: Elasticity of demand measures the responsiveness of change in quantity demanded to change in price…

Q: When her income falls from $50,000 to $20,000, Arianna increases her monthly purchase of hamburger…

A: Income elasticity of demand estimates how the demand for a fair or administration changes when the…

Q: QUESTION 5 We would expect the cross elasticity of demand between dress coffee and tea to be O…

A: Demand is the willingness and ability of consumers for consuming and buying goods and services at…

Q: 4. Suppose that when the price rises by 40% for a particular good, the quantity demanded of that…

A: Price elasticity of demand (Ep) = % Change in quantity demanded / % Change in the good's own price

Q: 1.Suppose the price of gasoline rises from $1.89 to 2.17 per gallon, and in response the quantity…

A: Here we calculate the followings terms by using the given information , so the calculation of the…

Q: 2) Suppose the quantity of Ülker biscuits demanded RISES by 10 % and the price elasticity of demand…

A: Demand is the willingness and ability of consumers for consuming and buying goods and services at…

Q: . Suppose the own price elasticity of demand for good X is −5, its income elasticity is 2, its…

A: a. Price elasticity of demand of good X=(-)%change in the quantity demanded of good X / %change in…

Q: Suppose that the price elasticity of demand for tennis shoes is -0.5 and the cross- price elasticity…

A: Price elasticity of demand measures the responsiveness in quantity demanded of a commodity to a…

Q: 5. Suppose that when the price of laundry detergent decreases from $4.10 to $3.50, quantity supplied…

A: Arc elasticity estimates elasticity at the midpoint between two chose focuses on the demand curve by…

Q: 7) If the income elasticity of demand for books is 1,5, a 10 % increase in the income of consumers…

A: Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: 4. Samir buys one ice cream a day. If the price rises, he will buy zero ice creams a day. The price…

A: Demand is the total quantity of commodities that the consumers are willing to buy at various prices.…

Q: 3. If the (own) price elasticity for Apple's iPhone is 1.5 (E = 1.5), then a 5% decrease in the…

A: The elasticity of demand measures the responsiveness or magnitude of change in the quantity demanded…

Q: Suppose the own price elasticity of demand for good X is –3, its income elasticity is -3, its…

A: Price elasticity of demand measures the responsiveness in quantity demanded of a commodity to a…

Q: If the price elasticity of demand for frozen pizza is -1.41. What happens to sales revenu if the…

A: Given the price elasticity of demand = -1.41

Q: 6. When as a result of decrease in price of good, the total expenditure made on it decreases we say…

A: To find : Price elasticity of demand

Q: Suppose a restaurant earns $4,000 per week in revenues from hamburger sales (X) and $2,000 per week…

A: Elasticity refers to the economic measure that tells how sensitive an economic factor is to another.…

Q: 5.Your price elasticity of demand for bananas is 4. If the price of bananas rises by 5 percent, what…

A: Given Information: Price elasticity of demand for bananas = 4 The rise in Price of bananas =5%

Q: 13. What would you expect the price elasticty of demand for bread be? a) Relatively price elastic c)…

A: The price elasticity of demand is employed to measure the changes in quantity demanded of goods and…

Q: Jonathan's income falls by 15%. He decides to cut down his purchases of high-end restaurant meals by…

A: Income elasticity of demand depicts how much consumer responds with the change in his/her income.

Q: 6. If quantity demanded for sneakers falls by 10 percent when price increases 25 percent, we know…

A: Elaticity of demand measures the how much demand changes due to change in price.

Q: #13. If the cross-price elasticity between Good A and Good B is −1.5 and the percentage change in…

Q: 1. If a 7 percent rise in the price of Pepsi increases the quantity of Coca Cola demanded by 4…

A: Cross Price Elasticity refers that when change in price of one product will affect the quantity of…

Q: 2) Analyze the three determinants of demand for table salt. Accordingly, is the demand for salt…

A: 2) The demand for table salt can be determined by various factors: a) Own price of good – if the…

Q: 1. Suppose the price of peanut butter rises from $2 to $4 per jar. Instructions: Round your answer…

A: The Cross Price elasticity of demand is defined as the how much the quantity demanded of one good…

Q: quantity demanded decreases from 20,000 to 18,000 gallons. a. What is the price elasticity of…

A: An elastic demand is one in which the change in quantity demanded due to a change in price is large.…

Q: Pleased answer attached

A: Since we only answer up to 3 sub-parts we will answer the first 3. Please resubmit the question…

Q: The demand for movie tickets in a small town is given as QO = 1,000 – 50P | Answer the following…

A: Given: qD=1000-50pNow,dqdp=∂q(D)∂Pdqdp=-50Now,we have to determine unit elastic of demand Thus,ED=-1

Q: Suppose the own price elasticity of demand for good X is −5, its income elasticity is 1, its…

Q: (4) Suppose the price elasticity of demand for a good is -0.2. If there is a 5% increase in the…

A: We have given that the price elasticity of demand is -0.2 The formula for price elasticity of…

Q: 16.) Suppose that a demand curve passes through the points (4,$4.00) and (8,$2.00). What is the…

A: Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: 2. If the price of canned goods in the grocery store increases by 8% and the quantity demanded…

A: Price elasticity is a method for calculating the change in quantity requested as a result of a…

Q: 4) Suppose that the cross price elasticity between goods A and B is -2.5, one may conclude that a 10…

A: Hi Student, Thanks for posting this question. As per the guideline we are providing answer for the…

Q: 3. A demand equation for rice is Quantity = 100 - 10(Price) + 5(Income). Show your calculations in…

A: Answer: Given that: A demand equation for rice is Quantity = 100-10(Price) + 5(Income). Q = 100…

Q: Why is the price elasticity of demand for Coca-Cola greater than price elasticity of demand for soft…

A: The price elasticity of demand can be measured by dividing the percentage change in quantity…

Q: 18. The cross-price elasticity for textbooks and copies of old exams is -3.5. If the price of copies…

A: The cross elasticity of demand basically refers to an economic term that assesses how sensitive a…

Q: 7. If the price elasticity of demand for a good is -0,5 and the firm increases the price of this…

A: Answer: (7). d (decrease by 5%) Explanation: Elasticity shows the % change in quantity demanded due…

Q: QUESTION 6 If the income elasticity for the demand of gasoline is equal to 1 and the income…

A: A good is a normal good when its demand increases with increase in income.

Q: The income elasticity of demand for jewelry is +2. Other things equal, a 10 percent increase in…

A: Income elasticity of demand is a measure of the percentage changes in quantity demanded of a good…

Q: 2. Show that the price elasticity of demand is constant for demand functions of the form A P=- Q"…

A: Answer to the question is as follows :

Question

6. Assume the price elasticity of demand for Master chips is -2.0. If the company
decreases the price of each bag of chips from $1.89 to $1.49, the number of bags
sold will: *
O Decrease by 39 percent.
Increase by 47 percent.
O Increase by 39 percent.
O Increase by 24 percent.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

What would the gasoline price elasticity of supply mean to UPS or FedEx?
Using the midpoint formula for calculating the elasticity of supply, if the price of a good rose from $95 to $105, what would be the elasticity of supply if the quantity supplied changed from a. 38 to 42? b. 78 to 82? c. 54 to 66?
Suppose you could buy shoes one at a time, miter than in pain. What do you predict the cross-price elasticity for left shoes and right shoes would be?
According to the previous discussion, what factors influence the price elasticity of demand for cigarettes? What other factors not mentioned in the article might influence the price elasticity of demand for cigarettes?
Would you usually expect elasticity of demand or supply to be higher in the short run or in the long run? Why?
The equation for a demand curve is P=2/Q. What is the elasticity of demand as price falls from 5 to 4? What is the elasticity of demand as the price falls from 9 to 8? Would you expect these answers to be the same?
100 PRICE 90 80 70 60 50 40 30 20 10 Demand 5 10 15 20 25 30 35 40 45 50 QUANTITY Refer to Figure 5-3. Using the midpoint method, between prices of $70 and $80, price elasticity of demand is about O a. 0.40. Ob.0.13. O c. 3.00 O d. 0.33.
To increase revenues, an ice cream retailer is planning to lower prices. This action will have the desired effect of increasing revenues if demand for that particular ice cream O a. Has zero price elasticity. Ở b. Has unit price elasticity. O c. Is elastic. O d. Is inelastic.
QUESTION 3 What will happen to the price elasticity of demand for Ford sport-utility vehicles (SUVS) when the government bans importation of SUV's from Japan? O A. Decrease В. Remain constant O C. Equal unity O D. Increase QUESTION 4
Which of the following is not a type of elasticity of demand? O a. Cost elasticity of demand O b. Price elasticity of demand O c. Income elasticity of demand O d. Cross elasticity of demand
Figure 64 Price $10 D2 D1 0. 10 Quantity 64. Refer to Figure 64. What kind of shift in demand does this graph show? Select one: O a. An increase in demand Ob. A decrease in demand O c. None of the above O d. A movement in demand
2. The demand for such products as salt, bread, and electricity tend to be: * O of unit price elasticity Relatively price inelastic O Perfectly price elastic Relatively price elastic