Microeconomics

The price elasticity of demand for gasoline is estimated to be -0.2. T

The price elasticity of demand for gasoline is estimated to be -0.2. Two million gallons are sold daily at a price of $3. Use this information to calculate a demand curve for gasoline assuming it is linear. What will be an ideal response?   ANSWER Elasticity = slope (p/Q), -0.2 = slope (3/2). The slope […]

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Date: September 9th, 2020

An agricultural corn market faces a positive supply shock due to a ben

An agricultural corn market faces a positive supply shock due to a beneficial rainy season and the use of new genetically modified seeds. As a result, farmers face the largest crop harvest in decades. Which answer below explains how a farm could actually go bankrupt under this scenario. A) The elasticity of supply for corn […]

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Date: September 9th, 2020

Because demand curves slope downward according to the Law of Demand, t

Because demand curves slope downward according to the Law of Demand, the price elasticity of demand is a negative number. Indicate whether the statement is true or false   ANSWER True . The price elasticity of demand measures the change in quantity demanded when a price change occurs. If price increases, the change in the […]

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Date: September 9th, 2020