1) 1) Suppose the government of Nova Scotia wants to reduce the consumption of electricity by 5 percent. The price elasticity of demand for electricity is 0.40. You advise the Nova Scotia government to A) lower the price of electricity by 2 percent. B) raise the price of electricity by 12.5 percent. C) raise the price of electricity by 2 percent. D) stay away from the market for electricity and let the market mechanism fix the problem. E) lower the price of electricity by 12.5 percent.

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mdasfaaruddinshareefLv10

1 Mar 2023

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Deanna HettingerLv2

30 Jul 2018

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Related questions

In an attempt to induce citizens to conserve energy, the government enacted regulations requiring all air conditioners to be more efficient in their use of electricity. After this regulation was implemented, government officials were surprised to discover that people used even more electricity than before. Using the concept of price elasticity, which of the following statements explains how this could happen. Circle all that apply. Hint: You must graph the market for Cold Air in order to make a reasonable conclusion.

A. The demand for cold air must have increased as the price of another degree of cooler air decreased with a more efficient air conditioner.

B. ALL Individuals must have responded to the change in the price to produce cold air by lowering their thermostats significantly.

C. The demand for cold air must be elastic and the price for another degree of cooler air decreased.

D. The demand for cold air must be inelastic and the price for another degree of cooler air decreased.

E. The increase in the quantity demanded for cold air must have overpowered the efficiency gains from the newer air conditioners.

sapphirealpaca185

10. If own price elasticity of demand is 2, the demand for the good is characterized as ___________ and, to generate more revenue, the firm should marginally ___________ the price.

(a) elastic; increase (b) inelastic; increase (c) elastic; reduce (d) inelastic; reduce

11. Whenever I watch a movie I like to eat a bowl of cold cereal. For me, the cross-price elasticity of movies and cold cereal is thus:

(a) zero (b) positive (c) negative (d) it depends on the magnitude of the price change

12. Which of the following would likely have the most elastic demand?

(a) salt (b) cigarettes (c) electricity (d) Coca-Cola

13. If your demand for cheesecake is given by the equation QD = 12-2P. What is your elasticity of demand when the price is $5?

(a) 2 (b) 1/2 (c) -2 (d) 5

14. If marginal product is at a maximum, the

(a) marginal cost is at a minimum (b) average variable cost is at a maximum (c) total fixed cost is at a maximum (d) average total cost is at a maximum

silverhyena89

Suppose the own price elasticity of demand for good X is -3, its income elasticity is 1, its advertising elasticity is 2, and the cross-price elasticity of demand between it and good Y is -4. Determine how much the consumption of this good will change if:

a. The price of good X decreases by 5 percent.

b. The price of good Y increases by 8 percent.

c. Advertising decreases by 4 percent.

d. Income increases by 4 percent.