ECO 2023 Lecture Notes - Lecture 9: Microeconomics, Consumer Spending, Marginal Utility
Document Summary
If the price elasticity of demand for a good at the current price is ed = 4, then a 10 percent increase in price will result in a: Along a linear demand curve as price is lowered from the choke price to zero the price elasticity of demand: An individual"s total expenditures on a good are equal to the quantity purchased multiplied by the per- unit price of the good. If an individual"s demand function for a good is given by the linear equation q = 60 - 0. 25p, then as price decreases from the choke price to zero his/her total expenditures on the good: Suppose the market demand for a good is described by the demand function p = 80 - 0. 5q. It follows that the total revenue function relating the total revenues in the market (tr) to the quantity sold (q) is: Given this information, it may be concluded that for the average household:
