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Author Question: If a price of corn is 3.00 a bushel, 5,000 bushels would be demanded. If the price rises to 4.00 a ... (Read 112 times)

tingc95

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on: Jul 1, 2018
If a price of corn is 3.00 a bushel, 5,000 bushels would be demanded. If the price rises to 4.00 a bushel, 4,000 bushels would be demanded.
 
  a. What is the (arc) price elasticity of demand?
  b. Based on this answer, if the price of corn rose to 5.00 a bushel, what would be the demand for corn?
  c. If the price of corn decreased from 4.00 to 3.00 a bushel, what would be the change in total revenue for sellers of corn?
  d. If the price of corn increased from 4.00 to 5.00 a bushel, what would be the change in total revenue for sellers of corn?

Question 2

If firms are earning economic profit in a monopolistically competitive market, which of the following is most likely to happen in the long run?
 
  A) Some firms will leave the market.
  B) Firms will join together to keep others from entering.
  C) New firms will enter the market, thereby eliminating the economic profit.
  D) Firms will continue to earn economic profit.


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cici

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Reply #1 on: Jul 1, 2018
Answer to Question 1

(a) -0.778; (b) 3,309; (c) -1,000; (d) +545

Answer to Question 2

C


tingc95

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Reply 2 on: Jul 1, 2018
Thanks for the timely response, appreciate it

upturnedfurball

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Reply 3 on: Yesterday
:D TYSM

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