ECON101 Lecture Notes - Lecture 4: Demand Curve, Normal Good, Inferior Good

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cerisechinchilla481

31 Oct 2018

School

University of Waterloo

Department

Economics

Course

ECON101

Professor

Fatma

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ECON101 Full Course Notes

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To calculate the price elasticity of demand for pizza, the quantity demand of pizza at two different places must be determined when all other influences on consumed plan purchases remain the same. Figure 4. 2 calculates the price elasticity of demand for pizza. The price is . 50 a pizza and 9 pizzas an hour are demanded (original point). . 50 a pizza and 11 pizzas an hour are demanded (new point). When the price falls by a pizza, the quantity demanded increases by 2 pizzas an hour. To calculate the price elasticity of demand, we express the change in price as a percentage of the average price and the change in the quantity demanded as a percentage of the average quantity. Through using the average price and average quantity, we calculate the elasticity at a point on the demand curve midway between the original point and the new point.

Related Questions

When the price of the pizza was $10.00 for a medium pizza, students at a college consumed 400 pizzas per week. When the price of pizza increased to $30.00 for a medium pizza, students at a college consumed 100 pizzas per week. Calculate the price elasticity of demand for medium pizzas for the students. You must show your work to receive credit for your calculation. If the price of pizza increases by 1%, by what will the percentage change in quantity demanded of pizzas for the students?

violetleopard499

(a) If the price of a slice of pizza at a local pizzeria is $5.00 and the quantity demanded at this price is 50 slices, what is the price elasticity of demand for pizza if, when the price is increased to $5.50, the quantity demanded for pizza slices falls to 30 slices?

(b) An analyst working in this area reveals that generally pizza has a price elasticity of demand equal to 0.8. If this was true, what should have happened to the quantity demanded for pizza slices at this local pizzeria? (Compute this).

(c) Finally, provide an explanation for why the results from the analyst might be plausible even though not compatible with the actual outcome for the pizzeria.

indigocod339

11.The concept of total surplus is a useful but imperfect measure of:

A. wellbeing

B. comparative advantage

C. market power

D. price elasticity of demand

12.Assume that burgers and pizzas are substitute goods in consumption only. When the burger price increases we will see which of the following changes in the pizza market?

A. An increase in demand and an increase in supply

B. An increase in demand and an increase in the quantity supplied

C. An increase in the quantity demanded and an increase in supply

D. An increase in the quantity demanded and no change to the quantity supplied

13.If the current price in a competitive market is $10 and the minimum of the the average total cost curve for a representative firm is $12, what is likely to occur to the market supply curve and the market price?

A. Supply will decrease and the price will rise

B. Supply will decrease and the price will fall

C. Supply will increase and the price will rise

D. Supply will increase and the price will fall

coralhyena258

ECON101 Lecture Notes - Lecture 4: Demand Curve, Normal Good, Inferior Good

ECON101 Full Course Notes

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