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27 Jul 2018

c. What is the cross-price elasticity of demand between good X and good Z when
Px = $140? Are goods X and Z substitutes or complements?

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Elin Hessel
Elin HesselLv2
27 Jul 2018

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Related questions

5. The demand curve for a product is given by Qdx = 1,000 - 2Px + .02Pz where Pz = $400. (Hint: If you're not comfortable with the calculus alternatives, compute Q at the given prices, then again with a 1% increase in price. Then figure percentage change in Q over the percentage change in P, %Q/%P).

a. What is the own-price elasticity of demand when Px = $154? Is the demand elastic or inelastic? What would happen to the firm's revenue if it decided to charge a price below $154?

b. What is the own-price elasticity of demand when Px = $354? Is the demand elastic or inelastic? What would happen to the firm's revenue if it decided to charge a price below $354?

c. What is the cross-price elasticity of demand between good X and good Z when Px = $154? Are good X and good Z substitutes are complements?

The demand curve for a mineral product (gold) is given by 𝑄π‘₯𝑑 = 1,200 βˆ’ 3𝑃π‘₯ βˆ’ 0.1𝑃𝑧, where 𝑃𝑧 = $300.00

a. What is the own-price elasticity of demand when 𝑃π‘₯ = $140.00? Is demand elastic or inelastic at this price? What would happen to the firm’s revenue if it decided to charge a price below $140.00? Explain

b. What is the own-price elasticity of demand when 𝑃π‘₯ = $240.00? Is demand elastic or inelastic at this price? What would happen to the firm’s revenue if it decided to charge a price above $240.00? Explain

c. What is the cross-elasticity of demand between good X and good Z when 𝑃π‘₯ = $140.00? Are goods X and Z substitutes or complements? Explain

38. Last month, sellers of Good Y's revenue was $100 and sold 50 units of Good Y. This month sellers of Good Y raised their price, received $120 in revenue and sold 40 units of Good Y. At the same time, the price of Good X stayed the same, but sales of Good X increased from 20 units to 40 units. What can we conclude about Goods X and Y? a. They are substitutes, and have a cross-price elasticity of 0.60. b. They are complements, and have a cross-price elasticity of 0.60. c. They are substitutes, and have a cross-price clasticity of 1.67. d. They are complements, and have a cross-price elasticity of 1.67.

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