Question: more on elasticity

1. When the price of good A is $50, the quantity demanded of good A is 500 units. When the price of good A rises to $70, the quantity demanded of good A falls to 400 units. Using the midpoint method, find the price elasticity of demand for good A.
2. Skip’s Sealcoating Service increased its total monthly revenue from $12,000 to $13,500 when it raised the price of driveway repairs from $600 to $750. What is the price elasticity of demand for Skip’s Sealcoating Service?
3. Suppose that when the price of wheat is $2 per bushel, farmers can sell 10 million bushels. When the price of wheat is $3 per bushel, farmers can sell 8 million bushels. Calculate the price elasticity of demand and describe how an increase in price would affect the total revenue of farmers.
4. Suppose that 50 hot dogs are supplied at a particular price. If the price of hot dogs rises from that price by 5 percent, the number of hot dogs supplied increases to 52. Using the midpoint approach, calculate the price elasticity of supply.

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