Production Decisions in the Perfectly Competitive Markets Berries are produced in a perfectly competitive market.
September 3, 2020
For many years, the Justice Department has tried to break up large firms like IBM, Microsoft, and most recently Google, on the grounds that their…
September 3, 2020

Assume that demand curve for a product is given by:

Q(d/x) = 1200 – 3Px – 0.1Pz

Where Pz = $300

(a) What is the own price elasticity of demand when PX = $140? Use the point elasticity formula. Please show all calculations. 

(b) Is this a necessary or a luxury good? Please explain.

(c) What will happen to the firm’s revenue if it decided to charge a price below $140? Please explain and show all calculations.

(d) What is the cross price elasticity between Good X and Good Z when PX = $140 and

PZ= $300? Are goods X and Z substitutes or complements? Please explain and show all calculations.

Place Order