Exam 5: Elasticity and Its Application

An increase in the price of pure chocolate morsels from $3.25 to $3.45 causes Nestle to increase production from 125 bags per minute to 145 bags per minute.What do we know about the elasticity of supply

Supply tends to be more elastic in the short run and more inelastic in the long run.

Moving up a linear demand curve,what happens to total revenue

The midpoint method is used to calculate elasticity between two points because it gives the same answer regardless of the direction of the change.

Figure 5-1 -Refer to Figure 5-1.If the price decreased from $18 to $6,what would happen to total revenue and what would this imply about demand elasticity

When is demand said to be inelastic

Which of the following types of goods would have a large income elasticity

Why could the discovery of a new hybrid wheat lower farmers' revenue

If the demand for sushi is downward sloping,what will a decrease in the price of sushi do

You produce bird houses.If the demand for bird houses is elastic and you want to increase your total revenue,what should you do

If the cross-price elasticity of demand of two goods is 2.5,what would the two goods be

When demand is elastic,what is the price elasticity,and how will price and total revenue behave

When studying how some event or policy affects a market,on what does elasticity provide information

In general terms,what does elasticity measure

Holding all other factors constant,if raising the price of a good results in less total revenue,what must the demand for the good be

What happens if sellers respond substantially to changes in price

What can you conclude about the price elasticity of demand in each of the following statements a.The furnace cleaning business in this city is very competitive.I'd lose half my customers if I raised the price by as little as 10 percent." b.My economics professor has chosen to use Mankiw's textbook for this class,so I have no choice but to buy it." c.I spend exactly $10 on coffee every week." d.Apple prices doubled this year since all flowers were killed in the spring frost; however,the total sales of apples are only decreased by 20 percent."

As elasticity of demand increases,what happens to the demand curve

Holding all else constant,if a pencil manufacturer increases production by 25 percent when the market price of pencils increases from $0.50 to $0.60,what is the price elasticity of supply,using the midpoint method

What happens as elasticity of supply rises