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Using the factors that influence the price elasticity of demand, do you think a college education is an elastic or inelastic good?

Often times when a college campus has overcrowded parking, they raise the price of parking permits to lessen the problem. Does this policy work? Explain why or why not using supply and demand and/or elasticity.

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Yusra Anees
Yusra AneesLv10
28 Sep 2019

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Explain why the demand for the good or service provided by a firm is elastic or inelastic. How does the elastic or inelastic demand influence pricing decisions by the firm to maximize profit? What are the impacts of elastic demand and inelastic demand on total revenue?

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Take a minute to think about the demand for college education and whether or not the costs of attending college (not just tuition, but also some of the opportunity costs associated with attendance) influence the number of students who attend college. Now tell me whether or not you think a college education is elastic or inelastic about the price, and back up your answer with an explanation as to why you believe what you do. There are no "right" or "wrong" answers to this, but I am interested in your thought process, and this will be graded solely on content.

AT LEAST two paragraphs, please.

Q3 Elasticities (2p) a. Assume the market demand for wheat may be written as Q = 45 - 2p + 0.3Y + 1pb where Y refers to income and pb refers to the price of barley. Assuming that wheat and barley both sell for $1, and income is $20, calculate the price elasticity, cross price elasticity and income elasticity for wheat. b. Explain why when the demand curve for a good is elastic, a one percent reduction in the price of the good will increase a consumer's expenditure on the good. c. Explain why the price elasticity of demand changes along a linear demand curve. d. Explain whether you would expect the elasticity of supply to be highly elastic or inelastic for fresh cut flowers and why.

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