Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.

Get a Professional Answer

Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.

100% Satisfaction Guarantee

Rate the answer you receive.

Ask R.R. Jha Your Own Question

R.R. Jha, Tutor

Category: Homework

Satisfied Customers: 5471

Experience: B.Tech

20870358

Type Your Homework Question Here...

R.R. Jha is online now

Use the arc-approximation formula to calculate the price-elasticity

Resolved Question:

Use the arc-approximation formula to calculate the price-elasticity of demand coefficient of a firm's product demand between the (quantity, price) points ($100, $20) and ($300, $10). Calculate the cross price elasticity of demand coefficient of a firm's product Y, causes the quantity demand of product X to increase by 10%. Calculate the income-elasticity of demand coefficient for a product for which a 4% increase in consumer's income will increase the quantity demanded by 6%

Use the arc-approximation formula to calculate the price-elasticity of demand coefficient of a firm's product demand between the (quantity, price) points ($100, $20) and ($300, $10)

Calculate the income-elasticity of demand coefficient for a product for which a 4% increase in consumer's income will increase the quantity demanded by 6%

Income elasticity of demand = %change in demand / %change in income = 6% / 4% = 1.5

I also had in the question Calculate the cross-price elasticity of demand coefficient of a firm's product X, given that a 5% increase in the price of its close substitute, Product Y, causes the quantity demand of product X to increase by 10%. I do not see that calculation.

And I too reviewed the answer by another expert. I think it isn't quite clear. I've posted a cleaner answer. Just double click any highlighted cell to see formula used.

Are you able to do the 2nd homework problem that I submitted because I have not heard from the person that worked on it and I am trying to understand how the work was done.

Hope you received my answer on marginal and average cost schedule. All set, please don't forget to hit accept button. Then let me know if I could help with any other question.